THIRD DIVISION resources.

G.R. No. 178835, February 13, 2009

MAGIS YOUNG ACHIEVERS' LEARNING CENTER AND MRS. VIOLETA T. CARIÑO, As agreed upon by the Board of Directors, the position of PRINCIPAL will be abolished
PETITIONERS, VS. ADELAIDA P. MANALO, RESPONDENT. next school year. Therefore, we regret to inform you that we can no longer renew your
contract, which will expire on March 31, 2003. Thus, thank you for the input you have
DECISION given to Magis during your term of office as Acting Principal. The function of the said
NACHURA, J.: position shall be delegated to other staff members in the organization.

This is a petition for review on certiorari of the Decision dated January 31, 2007 and of Hoping for your understanding on this matter and we pray for your future endeavors.
the Resolution dated June 29, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 93917
entitled Magis Young Achievers' Learning Center and Violeta T. Cariño v. National Labor Very truly yours,
Relations Commission, 3rd Division, Quezon City, and Adelaida P. Manalo.
(Signed)
The pertinent facts are as follows: Mrs. Violeta T. Cariñ o
School Directress
On April 18, 2002, respondent Adelaida P. Manalo was hired as a teacher and acting
principal of petitioner Magis Young Achievers' Learning Center with a monthly salary of Noted by:
P15,000.00.
(Signed)
It appears on record that respondent, on March 29, 2003, wrote a letter of resignation Mr. Severo Cariñ o
addressed to Violeta T. Cariñ o, directress of petitioner, which reads: President[2]
Dear Madame: On April 4, 2003, respondent instituted against petitioner a Complaint[3] for illegal
dismissal and non-payment of 13th month pay, with a prayer for reinstatement, award of
I am tendering my irrevocable resignation effective April 1, 2003 due to personal and full backwages and moral and exemplary damages.
family reasons.
In her position paper,[4] respondent claimed that her termination violated the provisions
I would like to express my thanks and gratitude for the opportunity, trust and confidence of her employment contract, and that the alleged abolition of the position of Principal was
given to me as an Acting Principal in your prestigious school. not among the grounds for termination by an employer under Article 282 [5] of the Labor
Code. She further asserted that petitioner infringed Article 283 [6] of the Labor Code, as the
God bless and more power to you. required 30-day notice to the Department of Labor and Employment (DOLE) and to her
as the employee, and the payment of her separation pay were not complied with. She also
Sincerely yours, claimed that she was terminated from service for the alleged expiration of her
employment, but that her contract did not provide for a fixed term or period. She likewise
(Signed) prayed for the payment of her 13th month pay under Presidential Decree (PD) No. 851.

Mrs. ADELAIDA P. MANALO[1] Petitioner, in its position paper, [7] countered that respondent was legally terminated
On March 31, 2003, respondent received a letter of termination from petitioner, viz.: because the one-year probationary period, from April 1, 2002 to March 3, 2003, had
Dear Mrs. Manalo: already lapsed and she failed to meet the criteria set by the school pursuant to the
Manual of Regulation for Private Schools, adopted by the then Department of Education,
Greetings of Peace! Culture and Sports (DECS), paragraph 75 of which provides that:

The Board of Trustees of the Cariñ o Group of Companies, particularly that of Magis Young (75) Full-time teachers who have rendered three years of satisfactory service shall be
Achievers' Learning Center convened, deliberated and came up with a Board Resolution considered permanent.
that will strictly impose all means possible to come up with a cost-cutting scheme. Part of
that scheme is a systematic reorganization which will entail streamlining of human On December 3, 2003, Labor Arbiter (LA) Renell Joseph R. dela Cruz rendered a

1
Decision [8] dismissing the complaint for illegal dismissal, including the other claims of Before going to the core issues of the controversy, we would like to restate basic legal
respondent, for lack of merit, except that it ordered the payment of her 13 th month pay in principles governing employment of secondary school teachers in private schools,
the amount of P3,750.00. The LA ratiocinated in this wise: specifically, on the matter of probationary employment.
It is our considered opinion [that] complainant was not dismissed, much less, illegally. On
the contrary, she resigned. It is hard for us to imagine complainant would accede to sign a A probationary employee or probationer is one who is on trial for an employer, during
resignation letter as a precondition to her hiring considering her educational background. which the latter determines whether or not he is qualified for permanent employment.
Thus, in the absence of any circumstance tending to show she was probably coerced her The probationary employment is intended to afford the employer an opportunity to
resignation must be upheld. x x x observe the fitness of a probationary employee while at work, and to ascertain whether
he will become an efficient and productive employee. While the employer observes the
x x x The agreement (Annex "1" to Respondent's [petitioner's] Position Paper; Annex "A" fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for
to Complainant's Position Paper) by its very nature and terms is a contract of permanent employment, the probationer, on the other hand, seeks to prove to the
employment with a period (from 01 April 2002 to 31 March 2003, Annex `1' to employer that he has the qualifications to meet the reasonable standards for permanent
Respondent's Position Paper). Complainant's observation that the space reserved for the employment. Thus, the word probationary, as used to describe the period of employment,
duration and effectivity of the contract was left blank (Annex `A' to Complainant's implies the purpose of the term or period, not its length.[13]
[respondent's] Position Paper) to our mind is plain oversight. Read in its entirety, it is a
standard contract which by its very terms and conditions speaks of a definite period of Indeed, the employer has the right, or is at liberty, to choose who will be hired and who
employment. The parties could have not thought otherwise. The notification requirement will be declined. As a component of this right to select his employees, the employer may
in the contract in case of "termination before the expiration of the period" confirms it. x x set or fix a probationary period within which the latter may test and observe the conduct
x of the former before hiring him permanently.[14]

On appeal, on October 28, 2005, the National Labor Relations Commission (NLRC), Third But the law regulates the exercise of this prerogative to fix the period of probationary
Division,[9] in its Decision[10] dated October 28, 2005, reversed the Arbiter's judgment. employment. While there is no statutory cap on the minimum term of probation, the law
Petitioner was ordered to reinstate respondent as a teacher, who shall be credited with sets a maximum "trial period" during which the employer may test the fitness and
one-year service of probationary employment, and to pay her the amounts of P3,750.00 efficiency of the employee.
and P325,000.00 representing her 13th month pay and backwages, respectively.
Petitioner's motion for reconsideration was denied in the NLRC's Resolution [11] dated The general rule on the maximum allowable period of probationary employment is found
January 31, 2006. in Article 281 of the Labor Code, which states:

Imputing grave abuse of discretion on the part of the NLRC, petitioner went up to the CA Art. 281. Probationary Employment. - Probationary employment shall not exceed six (6)
via a petition for certiorari. The CA, in its Decision dated January 31, 2007, affirmed the months from the date the employee started working, unless it is covered by an
NLRC decision and dismissed the petition. It likewise denied petitioner's motion for apprenticeship agreement stipulating a longer period. The services of an employee who
reconsideration in the Resolution dated June 29, 2007. has been engaged on a probationary basis may be terminated for a just cause or when he
Hence, this petition anchored on the following grounds— fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer at the time of his engagement. An employee who is allowed to
I THE COURT OF APPEALS ERRED WHEN IT CONCLUDED THAT THE RESIGNATION OF work after a probationary period shall be considered a regular employee.
RESPONDENT MANALO DID NOT BECOME EFFECTIVE DUE TO ALLEGED
LACK OF ACCEPTANCE; This upper limit on the term of probationary employment, however, does not apply to all
classes of occupations.
II THE COURT OF APPEALS ERRED WHEN IT RULED THAT RESPONDENT MANALO IS A
PERMANENT EMPLOYEE; For "academic personnel" in private schools, colleges and universities, probationary
employment is governed by Section 92 of the 1992 Manual of Regulations for Private
III THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONTRACT OF Schools[15] (Manual), which reads:
EMPLOYMENT BETWEEN PETITIONER AND RESPONDENT DID NOT
STIPULATE A PERIOD.[12] Section 92. Probationary Period. - Subject in all instances to compliance with the
Department and school requirements, the probationary period for academic personnel

2
shall not be more than three (3) consecutive years of satisfactory service for those in the Thus, for academic personnel in private elementary and secondary schools, it is only after
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory one has satisfactorily completed the probationary period of three (3) school years and is
service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory rehired that he acquires full tenure as a regular or permanent employee. In this regard,
service for those in the tertiary level where collegiate courses are offered on a trimester Section 93 of the Manual pertinently provides:
basis.[16] Sec. 93. Regular or Permanent Status. - Those who have served the probationary period
shall be made regular or permanent. Full-time teachers who have satisfactorily
This was supplemented by DOLE-DECS-CHED-TESDA Order No. 1 dated February 7, completed their probationary period shall be considered regular or permanent.
1996, which provides that the probationary period for academic personnel shall not be
more than three (3) consecutive school years of satisfactory service for those in the Accordingly, as held in Escudero, no vested right to a permanent appointment shall accrue
elementary and secondary levels.[17] By this supplement, it is made clear that the period of until the employee has completed the prerequisite three-year period necessary for the
probation for academic personnel shall be counted in terms of "school years," and not acquisition of a permanent status. Of course, the mere rendition of service for three
"calendar years."[18] Then, Section 4.m(4)[c] of the Manual delineates the coverage of consecutive years does not automatically ripen into a permanent appointment. It is also
Section 92, by defining the term "academic personnel" to include: necessary that the employee be a full-time teacher, and that the services he rendered are
satisfactory.[23]
(A)ll school personnel who are formally engaged in actual teaching service or in research
assignments, either on full-time or part-time basis; as well as those who possess certain The common practice is for the employer and the teacher to enter into a contract,
prescribed academic functions directly supportive of teaching, such as registrars, effective for one school year. At the end of the school year, the employer has the option
librarians, guidance counselors, researchers, and other similar persons. They include not to renew the contract, particularly considering the teacher's performance. If the
school officials responsible for academic matters, and may include other school contract is not renewed, the employment relationship terminates. If the contract is
officials.[19] renewed, usually for another school year, the probationary employment continues. Again,
at the end of that period, the parties may opt to renew or not to renew the contract. If
The reason for this disparate treatment was explained many years ago in Escudero v. renewed, this second renewal of the contract for another school year would then be the
Office of the President of the Philippines,[20] where the Court declared: last year - since it would be the third school year - of probationary employment. At the
end of this third year, the employer may now decide whether to extend a permanent
However, the six-month probationary period prescribed by the Secretary of Labor is appointment to the employee, primarily on the basis of the employee having met the
merely the general rule. x x x reasonable standards of competence and efficiency set by the employer. For the entire
duration of this three-year period, the teacher remains under probation. Upon the
It is, thus, clear that the Labor Code authorizes different probationary periods, expiration of his contract of employment, being simply on probation, he cannot
according to the requirements of the particular job. For private school teachers, the automatically claim security of tenure and compel the employer to renew his
period of probation is governed by the 1970 Manual of Regulations for Private Schools x x employment contract.[24] It is when the yearly contract is renewed for the third time that
x.[21] Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or
The probationary period of three years for private school teachers was, in fact, confirmed permanent employment status.
earlier in Labajo v. Alejandro,[22] viz.:
It is important that the contract of probationary employment specify the period or term
The three (3)-year period of service mentioned in paragraph 75 (of the Manual of of its effectivity. The failure to stipulate its precise duration could lead to the inference
Regulations for Private Schools) is of course the maximum period or upper limit, so to that the contract is binding for the full three-year probationary period. [25]
speak, of probationary employment allowed in the case of private school teachers. This
necessarily implies that a regular or permanent employment status may, under certain All this does not mean that academic personnel cannot acquire permanent employment
conditions, be attained in less than three (3) years. By and large, however, whether or not status earlier than after the lapse of three years. The period of probation may be reduced
one has indeed attained permanent status in one's employment, before the passage of if the employer, convinced of the fitness and efficiency of a probationary employee,
three (3) years, is a matter of proof. voluntarily extends a permanent appointment even before the three-year period ends.
Conversely, if the purpose sought by the employer is neither attained nor attainable
Over the years, even with the enactment of a new Labor Code and the revision of the within the said period, the law does not preclude the employer from terminating the
Manual, the rule has not changed. probationary employment on justifiable ground;[26] or, a shorter probationary period may
be incorporated in a collective bargaining agreement.[27] But absent any circumstances

3
which unmistakably show that an abbreviated probationary period has been agreed merely temporary, or one that is good until another appointment is made to take its
upon, the three-year probationary term governs. place.[33] An "acting" appointment is essentially a temporary appointment, revocable at
will. The undisturbed unanimity of cases shows that one who holds a temporary
Be that as it may, teachers on probationary employment enjoy security of tenure. In appointment has no fixed tenure of office; his employment can be terminated any time at
Biboso v. Victorias Milling Co., Inc.,[28] we made the following pronouncement: the pleasure of the appointing power without need to show that it is for cause. [34] Further,
This is, by no means, to assert that the security of tenure protection of the Constitution in La Salette of Santiago v. NLRC, [35] we acknowledged the customary arrangement in
does not apply to probationary employees. x x x During such period, they could remain in private schools to rotate administrative positions, e.g., Dean or Principal, among
their positions and any circumvention of their rights, in accordance with the statutory employees, without the employee so appointed attaining security of tenure with respect
scheme, is subject to inquiry and thereafter correction by the Department of Labor. to these positions.

The ruling in Biboso simply signifies that probationary employees enjoy security of We are also inclined to agree with the CA that the resignation of the respondent [36] is not
tenure during the term of their probationary employment. As such, they cannot be valid, not only because there was no express acceptance thereof by the employer, but
removed except for cause as provided by law, or if at the end of every yearly contract because there is a cloud of doubt as to the voluntariness of respondent's resignation.
during the three-year period, the employee does not meet the reasonable standards set
by the employer at the time of engagement. But this guarantee of security of tenure Resignation is the voluntary act of an employee who finds himself in a situation where he
applies only during the period of probation. Once that period expires, the constitutional believes that personal reasons cannot be sacrificed in favor of the exigency of the service,
protection can no longer be invoked.[29] and that he has no other choice but to dissociate himself from employment. [37] Voluntary
resignation is made with the intention of relinquishing an office, accompanied by the act
All these principles notwithstanding, we do not discount the validity of fixed-term of abandonment.[38] It is the acceptance of an employee's resignation that renders it
employment where - operative.[39]
the fixed period of employment was agreed upon knowingly and voluntarily by the Furthermore, well-entrenched is the rule that resignation is inconsistent with the filing of
parties, without any force, duress or improper pressure being brought to bear upon the a complaint for illegal dismissal.[40] To be valid, the resignation must be unconditional,
employee and absent any other circumstances vitiating his consent, or where it with the intent to operate as such; there must be a clear intention to relinquish the
satisfactorily appears that the employer and employee dealt with each other on more or position.[41] In this case, respondent actively pursued her illegal dismissal case against
less equal terms with no moral dominance whatever being exercised by the former over petitioner, such that she cannot be said to have voluntarily resigned from her job.
the latter.[30]
It does not necessarily follow that where the duties of the employees consist of activities What is truly contentious is whether the probationary appointment of the respondent on
usually necessary or desirable in the usual business of the employer, the parties are April 18, 2002 was for a fixed period of one (1) year, or without a fixed term, inasmuch as
forbidden from agreeing on a period of time for the performance of such activities. [31] the parties presented different versions of the employment agreement. As articulated by
Thus, in St. Theresa's School of Novaliches Foundation v. NLRC,[32] we held that a the CA:
contractual stipulation providing for a fixed term of nine (9) months, not being contrary In plain language, We are confronted with two (2) copies of an agreement, one with a
to law, morals, good customs, public order and public policy, is valid, binding and must be negative period and one provided for a one (1) year period for its effectivity. Ironically,
respected, as it is the contract of employment that governs the relationship of the parties. none among the parties offered corroborative evidence as to which of the two (2)
discrepancies is the correct one that must be given effect. x x x.[42]
Now, to the issues in the case at bench.
The CA resolved the impassé in this wise:
There should be no question that the employment of the respondent, as teacher, in
petitioner school on April 18, 2002 is probationary in character, consistent with standard Under this circumstance, We can only apply Article 1702 of the Civil Code which provides
practice in private schools. In light of our disquisition above, we cannot subscribe to the that, in case of doubt, all labor contracts shall be construed in favor of the laborer. Then,
proposition that the respondent has acquired regular or permanent tenure as teacher. too, settled is the rule that any ambiguity in a contract whose terms are susceptible of
She had rendered service as such only from April 18, 2002 until March 31, 2003. She has different interpretations must be read against the party who drafted it. In the case at bar,
not completed the requisite three-year period of probationary employment, as provided the drafter of the contract is herein petitioners and must, therefore, be read against their
in the Manual. She cannot, by right, claim permanent status. contention.[43]

There should also be no doubt that respondent's appointment as Acting Principal is We agree with the CA.

4
 apply likewise to the case of respondent. In other words, absent any concrete and
In this case, there truly existed a doubt as to which version of the employment agreement competent proof that her performance as a teacher was unsatisfactory from her hiring on
should be given weight. In respondent's copy, the period of effectivity of the agreement April 18, 2002 up to March 31, 2003, respondent is entitled to continue her three-year
remained blank. On the other hand, petitioner's copy provided for a one-year period, period of probationary period, such that from March 31, 2003, her probationary
surprisingly from April 1, 2002 to March 31, 2003, even though the pleadings submitted employment is deemed renewed for the following two school years. [47]
by both parties indicated that respondent was hired on April 18, 2002. What is noticeable
even more is that the handwriting indicating the one-year period in petitioner's copy is Finally, we rule on the propriety of the monetary awards. Petitioner, as employer, is
different from the handwriting that filled up the other needed information in the same entitled to decide whether to extend respondent a permanent status by renewing her
agreement.[44] contract beyond the three-year period. Given the acrimony between the parties which
must have been generated by this controversy, it can be said unequivocally that
Thus, following Article 1702 of the Civil Code that all doubts regarding labor contracts petitioner had opted not to extend respondent's employment beyond this period.
should be construed in favor of labor, then it should be respondent's copy which did not Therefore, the award of backwages as a consequence of the finding of illegal dismissal in
provide for an express period which should be upheld, especially when there are favor of respondent should be confined to the three-year probationary period. Computing
circumstances that render the version of petitioner suspect. This is in line with the State her monthly salary of P15,000.00 for the next two school years (P15,000.00 x 10 months
policy of affording protection to labor, such that the lowly laborer, who is usually at the x 2), respondent already having received her full salaries for the year 2002-2003, she is
mercy of the employer, must look up to the law to place him on equal footing with his entitled to a total amount of P300,000.00.[48] Moreover, respondent is also entitled to
employer.[45] receive her 13th month pay correspondent to the said two school years, computed as
yearly salary, divided by 12 months in a year, multiplied by 2, corresponding to the
In addition, the employment agreement may be likened into a contract of adhesion school years 2003-2004 and 2004-2005, or P150,000.00 / 12 months x 2 = P25,000.00.
considering that it is petitioner who insists that there existed an express period of one Thus, the NLRC was correct in awarding respondent the amount of P325,000.00 as
year from April 1, 2002 to March 31, 2003, using as proof its own copy of the agreement. backwages, inclusive of 13th month pay for the school years 2003-2004 and 2004-2005,
While contracts of adhesion are valid and binding, in cases of doubt which will cause a and the amount of P3,750.00 as pro-rated 13th month pay.
great imbalance of rights against one of the parties, the contract shall be construed
against the party who drafted the same. Hence, in this case, where the very employment WHEREFORE, the petition is DENIED. The assailed Decision dated January 31, 2007 and
of respondent is at stake, the doubt as to the period of employment must be construed in the Resolution dated June 29, 2007 of the Court of Appeals are AFFIRMED.
her favor.
SO ORDERED.
The other issue to resolve is whether respondent, even as a probationary employee, was
illegally dismissed. We rule in the affirmative. Ynares-Santiago, J., (Chairperson), Austria-Martinez, Chico-Nazario, and Peralta, JJ., concur.

As above discussed, probationary employees enjoy security of tenure during the term of
their probationary employment such that they may only be terminated for cause as
provided for by law, or if at the end of the probationary period, the employee failed to
meet the reasonable standards set by the employer at the time of the employee's
engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it
was incumbent upon petitioner to show by competent evidence that she did not meet the
standards set by the school. This requirement, petitioner failed to discharge. To note, the
termination of respondent was effected by that letter stating that she was being relieved
from employment because the school authorities allegedly decided, as a cost-cutting
measure, that the position of "Principal" was to be abolished. Nowhere in that letter was
respondent informed that her performance as a school teacher was less than satisfactory.

Thus, in light of our ruling of Espiritu Santo Parochial School v. NLRC[46] that, in the
absence of an express period of probation for private school teachers, the three-year
probationary period provided by the Manual of Regulations for Private Schools must

5
 THIRD DIVISION Appeals, petitioners were able to regain control of their arrastre and stevedoring
G.R. No. 173849, September 28, 2007 operations at Pier 8 on 12 March 2001.[7]
PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. AND/ OR ELIODORO C. CRUZ,
PETITIONERS, VS. JEFF B. BOCLOT, RESPONDENT. On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the NLRC,
claiming regularization; payment of service incentive leave and 13th month pays; moral,
DECISION exemplary and actual damages; and attorney’s fees.  Respondent alleged that he was
hired by PASSI in October 1999 and was issued company ID No. 304, [8] a PPA Pass and SSS
CHICO-NAZARIO, J.: documents.  In fact, respondent contended that he became a regular employee by April
2000, since it was his sixth continuous month in service in PASSI’s regular course of
In this Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, business.  He argued on the basis of Articles 280[9] and 281[10] of the Labor Code. He
petitioners pray that this Court annul and set aside the (a) Decision [1] dated 18 November maintains that under paragraph 2 of Article 280, he should be deemed a regular
2005 of the Court of Appeals in CA-G.R. SP No. 88929 affirming the twin Resolutions [2] employee having rendered at least one year of service with the company.
dated 29 October 2004[3] and 29 December 2004[4] of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 038683-04; and (b) Resolution dated 21 July According to respondent, he remained a casual employee from the time he was first hired
2006 of the appellate court in the same case, denying petitioners’ Motion for to perform the services of a stevedore. Thus, respondent claimed he was denied the rights
Reconsideration of the aforementioned Decision. and privileges of a regular employee, including those granted under the Collective
Bargaining Agreement (CBA) such as wage increase; medical, dental and hospitalization
The factual antecedents of the present petition are as follows: benefits; vacation and sick leaves; uniforms, Christmas gifts, productivity bonus, accident
insurance, special separation pays, and others. [11]
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic
corporation engaged in the business of providing arrastre and stevedoring services [5] at Respondent relied on Article XXV of the company’s existing CBA, effective 4 March 1998
Pier 8 in the Manila North Harbor.  PASSI has been rendering arrastre and stevedoring to 3 March 2003, which states the following:
services at the port area since 1974 and employs stevedores who assist in the loading and The Company agrees to convert to regular status all incumbent probationary or casual
unloading of cargoes to and from the vessels.  Petitioner Eliodoro C. Cruz is its Vice- employees and workers in the Company who have served the Company for an
President and General Manager. accumulated service term of employment of not less than six (6) months from his original
date of hiring
Respondent Jeff B. Boclot was hired by PASSI to perform the functions of a stevedore
starting 20 September 1999. The probationary period for all future workers or employees shall be the following:
All skilled workers such as crane operator, mechanic, carpenter, winchman,
The facts show that respondent rendered actual services to PASSI during the following signalman and checkers shall become regular after three (3) months
periods: continuous employment;

Period Duration All semi-skilled personnel shall become regular after four (4) months of
    continuous employment;
September - December 1999 (4 months) 21 days
January - April 2000 (4 months) 20 days All non-skilled personnel shall be regular after six (6) months continuous
March - December 2001 (10 months) 85 days employment.[12]
January - December 2002 (12 months) 70.5 days
January – June 2003 (6 months) 32 days In opposition thereto, petitioners alleged that respondent was hired as a mere “reliever”
    stevedore and could thus not become a regular employee.
Total 36 months      228.5 days[6]
On 24 November 2003, NLRC Labor Arbiter Felipe P. Pati ruled for petitioners and
On 15 April 2000, the Philippine Ports Authority (PPA) seized the facilities and took over dismissed respondent’s complaint.  In finding no factual or legal basis for the
the operations of PASSI through its Special Takeover Unit, absorbing PASSI workers as regularization of respondent, the Labor Arbiter came to the conclusion that respondent
well as their relievers. By virtue of a Decision dated 9 January 2001 of the Court of was “nothing more than an extra worker who is called upon to work at the pier in the

6
absence of regular stevedores at a certain shift.” [13]  He deemed that Articles 280 and 281 the Court of Appeals ruled that even assuming that respondent was able to render
of the Labor Code were inapplicable, on the contention that the aforementioned articles services for only 228.5 days in a period of 36 months, the fact remains that his services
speak of probationary employees and casual employees while respondent, as a reliever, is were continuously utilized by petitioners in their business. Where the job is usually
neither a probationary employee nor a casual employee.  Neither was respondent necessary or desirable to the main business of the employer, then the employment is
qualified to avail himself of Service Incentive Leave benefits, even assuming he was a regular.[16]  The pertinent portions of the assailed Decision of the Court of Appeals are
regular employee, because the number of days of service he had rendered reached a total herein reproduced:
of 228.5 days only -- short of 365 days, the one-year requirement to qualify for this
benefit.  Finally, respondent’s prayer for the grant of attorney’s fees, and for moral and Applying the above-mentioned principles, private respondent’s task of loading and
exemplary damages, was also denied. unloading cargoes to and from the vessels is undoubtedly necessary and desirable to the
business of petitioners’ arrastre and stevedoring services. Equally unavailing is the
Respondent appealed the Labor Arbiter’s dismissal of his complaint to the NLRC. petitioners’ contention that being a reliever or an extra worker, private respondent
Thereafter, the NLRC issued a Resolution on 29 October 2004 modifying the Labor cannot be deemed as a regular employee. This cannot be accorded with merit as the same
Arbiter’s Decision, ruling: does not change the nature of the latter’s employment. Whether private respondent was
hired only in the absence of regular stevedores, as petitioners maintain, let it be
WHEREFORE, premises considered, complainant’s appeal is partly GRANTED. The Labor emphasized that the determination of whether the employment is casual or regular does
Arbiter’s assailed Decision in the above-entitled case is hereby MODIFIED. Complainant is not depend on the will or word of the employer, and the procedure of hiring and manner
hereby declared a regular employee of Respondents.  The dismissal of Complainant’s claim of paying, but on the nature of the activities performed by an employee, and to some
for benefits under the CBA and other monetary claims are AFFIRMED for lack of jurisdiction extent, the length of performance, and its continued existence. Petitioners’ admission that
and lack of merit, respectively.[14]  (Italics ours.) it has been an industry practice to hire relievers whenever the need arises to ensure that
operations at the pier continue for 24 hours only proves that private respondent’s
The NLRC gave credence to respondent’s allegations that the Labor Arbiter committed services are necessary or desirable in its usual business, otherwise, private respondent
grave abuse of discretion in dismissing respondent’s claim for regularization.  The NLRC should not have been at the employ of petitioners for a period [of] 36 months. Even
ruled that petitioners’ failure, without reasonable explanation, to present proof of assuming that private respondent was able to render only 228.5 days out of 36 months,
absences of “regular” stevedores leads to the conclusion that the stevedores, termed by the undisputed fact remains that private respondent’s services was continuously utilized
petitioners as “relievers,” work on rotation basis, just like the “regular” stevedores.  The by petitioners in the operation of its business. Whether one’s employment is regular is
NLRC predicated its findings that respondent is a regular employee of petitioners on the not determined by the number of the hours one works, but by the nature of the work and
reasonable connection between the activity performed by the employee in relation to the by the length of time one has been in that particular job. To uphold petitioners’ argument
usual business or trade of the employer. According to the NLRC, although respondent would preclude and deprive workers, like private respondent herein, to acquire regular
rendered an average of 6.34 days of work a month, the activities performed were usually status favorably mandated by the Labor Code.
necessary and desirable in the business of petitioners.
xxxx
Petitioners filed a Motion for Reconsideration of the foregoing NLRC Resolution dated 29
October 2004 but this was subsequently denied in another NLRC Resolution issued on 29 WHEREFORE, the instant petition is DISMISSED for lack of merit and the assailed
December 2004. resolutions of public respondent National Labor Relations Commission dated October 29,
2004 and December 29, 2004 are hereby AFFIRMED.[17]
Upon a denial of their motion for reconsideration by the NLRC, petitioners elevated their On 14 December 2005, petitioners filed a Motion for Reconsideration, which was denied
case to the Court of Appeals via a Petition for Certiorari with prayer for the issuance of a by the Court of Appeals in a Resolution dated 21 July 2006.
Temporary Restraining Order (TRO) and/or writ of preliminary injunction.
Hence, through this Petition for Review on Certiorari, petitioners assail the Decision of
On 18 November 2005, the Court of Appeals dismissed the Petition for Certiorari and the Court of Appeals, raising the sole argument that:
affirmed the Resolutions of the NLRC finding respondent to be a regular employee.  The
Court of Appeals grounded its Decision on this Court’s previous rulings that what THE COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENT JEFF BOCLOT
determines regularity or casualness is not the employment contract, written or IS A REGULAR EMPLOYEE OF PETITIONER PIER 8 ARRASTRE & STEVEDORING
otherwise, but the nature of the job. Citing De Leon v. National Labor Relations SERVICES, INC. BECAUSE HE PERFORMED TASKS WHICH ARE USUALLY NECESSARY
Commission,[15] which enumerated the standards for determining regular employment, AND DESIRABLE TO THE MAIN BUSINESS OF PETITIONER CORPORATION

7
Evidently, the only issue subject to the resolution of this Court is whether or not the contrary notwithstanding and regardless of the oral agreement of the parties, an
respondent has attained regular status as PASSI’s employee. employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
In the instant petition, petitioners are vehemently denying that respondent has become of the employer, except where the employment has been fixed for a specific project or
PASSI’s regular employee. Petitioners insist that respondent was hired as a mere undertaking the completion or termination of which has been determined at the time of
“reliever” stevedore and, thus, could not become a regular stevedore.  Petitioners the engagement of the employee or where the work or services to be performed is
presented a list of the days when respondent’s services as stevedore were engaged, to seasonal in nature and the employment is for the duration of the season.
support its claim that respondent is a reliever.  Petitioners aver that the employment of
the stevedores is governed by a system of rotation.  Based on this system of rotation, the An employment shall be deemed to be casual if it is not covered by the preceding
work available to reliever stevedores is dependent on the actual stevedoring and arrastre paragraph: Provided, That, any employee who has rendered at least one year of service,
requirements at a current given time.  Petitioners posit that respondent, as a reliever whether such service is continuous or broken, shall be considered a regular employee
stevedore, is a mere extra worker whose work is dependent on the absence of regular with respect to the activity in which he is employed and his employment shall continue
stevedores during any given shift.  During “rotation proper,” as petitioners term it, all while such actually exist.
regular employees are first called and given work before any reliever is assigned. Under the foregoing provision, a regular employee is (1) one who is either engaged to
Petitioners assert that while the regular stevedores work an average of 4 days a week (or perform activities that are necessary or desirable in the usual trade or business of the
16 days a month), respondent performed services for a total of 228.5 days (or only for an employer except for project [21] or seasonal employees; or (2) a casual employee who has
average of 6.34 days a month) from September 1999 to June 2003.  In defense of the rendered at least one year of service, whether continuous or broken, with respect to the
Court of Appeals’ ruling grounded on Articles 280 and 281 of the Labor Code, petitioners activity in which he is employed. [22]  Additionally, Article 281 of the Labor Code further
maintain that the foregoing provisions are inapplicable on the postulation that considers a regular employee as one who is allowed to work after a probationary period.
respondent is neither a probationary nor a casual employee.  For the same reasons, Based on the aforementioned, although performing activities that are necessary or
petitioners argue that Article XXV of the CBA cannot be used to support respondent’s desirable in the usual trade or business of the employer, an employee such as a project or
contention that he is a regular employee since the CBA provision he invokes refers to “all seasonal employee is not necessarily a regular employee.  The situation of respondent is
incumbent probationary or casual employees and workers in the company” and not to similar to that of a project or seasonal employee, albeit on a daily basis.
respondent who is neither a casual nor a probationary employee.
Under the second paragraph of the same provision, all other employees who do not fall
After a deliberate study of Labor Law provisions and jurisprudence, and in light of the under the definition of the preceding paragraph are casual employees.  However, the
particular circumstances of this case, this Court has arrived at the same conclusion as second paragraph also provides that it deems as regular employees those casual
those of the NLRC and the Court of Appeals that respondent is a regular employee, but on employees who have rendered at least one year of service regardless of the fact that such
a different basis. service may be continuous or broken.

Under the 1987 Philippine Constitution, the State affords full protection to labor, local De Leon v. National Labor Relations Commission [23] succinctly explains the delineation of
and overseas, organized and unorganized; and the promotion of full employment and the foregoing employee classification, to wit:
equality of employment opportunities for all.  The State affirms labor as a primary social
economic force and guarantees that it shall protect the rights of workers and promote The primary standard, therefore, of determining a regular employment is the reasonable
their welfare.[18] connection between the particular activity performed by the employee in relation to the
usual business or trade of the employer.  The test is whether the former is usually
The Labor Code, which implements the foregoing Constitutional mandate, draws a fine necessary or desirable in the usual business or trade of the employer.  The connection can
line between regular and casual employees to protect the interests of labor. [19]  “Its be determined by considering the nature of the work performed and its relation to the
language evidently manifests the intent to safeguard the tenurial interest of the worker scheme of the particular business or trade in its entirety.  Also, if the employee has been
who may be denied the rights and benefits due a regular employee by virtue of lopsided performing the job for at least one year, even if the performance is not continuous or merely
agreements with the economically powerful employer who can maneuver to keep an intermittent, the law deems the repeated and continuing need for its performance as
employee on a casual status for as long as convenient.” [20]  Thus, the standards for sufficient evidence of the necessity if not indispensability of that activity to the business. 
determining whether an employee is a regular employee or a casual or project employee Hence, the employment is also considered regular, but only with respect to such activity
have been delineated in Article 280 of the Labor Code, to wit: and while such activity exists.  (Emphasis supplied.)
Article 280.  Regular and Casual Employment. -The provisions of written agreement to

8
PASSI is engaged in providing stevedoring and arrastre services in the port area in regular employee if said casual employee has rendered at least one year of service
Manila.  Stevedoring, dock and arrastre operations include, but are not limited to, the regardless of the fact that such service may be continuous or broken. Section 3, Rule V,
opening and closing of a vessel’s hatches; discharging of cargoes from ship to truck or Book II of the Implementing Rules and Regulations of the Labor Code clearly defines the
dock, lighters and barges, and vice-versa; movement of cargoes inside vessels, term “at least one year of service” to mean service within 12 months, whether continuous
warehouses, terminals and docks; and other related work.  In line with this, petitioners or broken, reckoned from the date the employee started working, including authorized
hire stevedores who assist in the loading and unloading of cargoes to and from the absences and paid regular holidays, unless the working days in the establishment as a
vessels. matter of practice or policy, or that provided in the employment contract, is less than 12
months, in which case said period shall be considered one year. [26]  If the employee has
Petitioners concede that whenever respondent worked as a reliever stevedore due to the been performing the job for at least one year, even if the performance is not continuous
absence of a regular stevedore, he performed tasks that are usually necessary and or merely intermittent, the law deems the repeated and continuing need for its
desirable to their business.  Petitioners, however, contend that this in itself does not performance as sufficient evidence of the necessity, if not indispensability, of that activity
make him a regular stevedore, postulating that the hiring of respondent as a reliever is to the business of the employer.[27]  Applying the foregoing, respondent, who has
akin to a situation in which a worker goes on vacation leave, sick leave, maternity leave or performed actual stevedoring services for petitioners only for an accumulated period of
paternity leave; and the employer is constrained to hire another worker from outside the 228.5 days does not fall under the classification of a casual turned regular employee after
establishment to ensure the smooth flow of its operations. rendering at least one year of service, whether continuous or intermittent.[28]

Based on the circumstances of the instant case, this Court agrees.  It takes judicial Both the Constitution and the Labor Code mandate the protection of labor.  Hence, as a
notice[24] that it is an industry practice in port services to hire “reliever” stevedores in matter of judicial policy, this Court has, in a number of instances, leaned backwards to
order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port protect labor and the working class against the machinations and incursions of their
area.  No doubt, serving as a stevedore, respondent performs tasks necessary or desirable more financially entrenched employers.[29]  Where from the circumstances it is apparent
to the usual business of petitioners.  However, it should be deemed part of the nature of that periods have been imposed to preclude acquisition of tenurial security by an
his work that he can only work as a stevedore in the absence of the employee regularly employee, such imposition should be struck down or disregarded as contrary to public
employed for the very same function. Bearing in mind that respondent performed policy and morals.[30]  However, we take this occasion to emphasize that the law, while
services from September 1999 until June 2003 for a period of only 228.5 days in 36 protecting the rights of the employees, authorizes neither the oppression nor the
months, or roughly an average of 6.34 days a month; while a regular stevedore working destruction of the employer.  When the law tilts the scale of justice in favor of labor, the
for petitioners, on the other hand, renders service for an average of 16 days a month, scale should never be so tilted if the result would be an injustice to the employer. [31]  Thus,
demonstrates that respondent’s employment is subject to the availability of work, this Court cannot be compelled to declare respondent as a regular employee when by the
depending on the absences of the regular stevedores. Moreover, respondent does not nature of respondent’s work as a reliever stevedore and his accumulated length of service
contest that he was well aware that he would only be given work when there are absent of only eight months do not qualify him to be declared as such under the provisions of the
or unavailable employees. Respondent also does not allege, nor is there any showing, that Labor Code alone.[32]
he was disallowed or prevented from offering his services to other cargo handlers in the
other piers at the North Harbor other than petitioners.  As aforestated, the situation of NONETHELESS, this Court still finds respondent to be a regular employee on the basis of
respondent is akin to that of a seasonal or project or term employee, albeit on a daily pertinent provisions under the CBA between PASSI and its Workers’ union, which was
basis. effective from 4 March 1998 to 3 March 2003:
The Company agrees to convert to regular status all incumbent probationary or casual
Anent petitioners’ contention that respondent is neither a probationary nor a casual employees and workers in the Company who have served the Company for an
employee, this Court again refers to Article 280 of the Labor Code. accumulated service term of employment of not less than six (6) months from his original
date of hiring.
The second paragraph thereof stipulates in unequivocal terms that all other employees
who do not fall under the definitions in the first paragraph of regular, project and The probationary period for all future workers or employees shall be the following:
seasonal employees, are deemed casual employees.[25] Not qualifying under any of the
kinds of employees covered by the first paragraph of Article 280 of the Labor Code, then (a)        All skilled workers such as crane operator, mechanic, carpenter, winchman,
respondent is a casual employee under the second paragraph of the same provision. signalman and checkers shall become regular after three (3) months continuous
employment;
The same provision, however, provides that a casual employee can be considered as

9
(b)        All semi-skilled personnel shall become regular after four (4) months of in CA-G.R. SP No. 88929 are AFFIRMED in the manner herein discussed.  Costs against
continuous employment; petitioners.

(c)        All non-skilled personnel shall be regular after six (6) months continuous SO ORDERED.
employment.[33]  (Italics ours.)
Puno, C.J.,  Ynares-Santiago, (Chairperson),  Austria-Martinez, and  Nachura, JJ., concur.
Petitioners were crucified on this argument raised by respondent.  The union which
negotiated the existing CBA is the sole and exclusive bargaining representative of all the
stevedores, dock workers, gang bosses, rank and file employees working at Pier 8, and its
offices.  The NLRC ruled that respondent’s reliance on the CBA to show that he has
become a regular employee is misplaced for the reason that the CBA applies only to
regular workers of the company. [34]  Respondent assents that he is not a member of the
union, as he was not recognized by PASSI as its regular employee, but this Court notes
that PASSI adopts a union-shop agreement, culling from Article II of the CBA which
stipulates:
The Union and the Company (PASSI) hereby agree to adopt the “Union Shop” as a
condition of employment to the position (sic) covered by this Agreement.[35]
Under a union-shop agreement, although nonmembers may be hired, an employee is
required to become a union member after a certain period, in order to retain employment.
This requirement applies to present and future employees. [36]  The same article of the CBA
stipulates that employment in PASSI cannot be obtained without prior membership in the
union.

Apropos, applying the foregoing provisions of the CBA, respondent should be considered
a regular employee after six months of accumulated service.  It is clearly stipulated
therein that petitioners shall agree to convert to regular status all incumbent
probationary or casual employees and workers in PASSI who have served PASSI for an
accumulated service term of employment of not less than six months from the original date
of hiring.  Having rendered 228.5 days, or eight months of service to petitioners since
1999, then respondent is entitled to regularization by virtue of the said CBA provisions.

In light of the foregoing, petitioners must accord respondent the status of a regular
employee.

Additionally, respondent is not yet entitled to avail himself of service incentive leave
benefits for his failure to render at least one year of service.  As to the 13th month pay,
petitioners have shown that respondent has been paid the same.  Respondent is also not
entitled to moral and exemplary damages and attorney’s fees for the reason that an
employer may only be held liable for damages if the attendant facts show that it was
oppressive to labor or done in a manner contrary to morals, good customs and public
policy.  None of the aforementioned circumstances are present.  Neither was there any
appeal raised by respondent pertaining to the non-award of the foregoing claims.

WHEREFORE, in view of the foregoing, the instant Petition is DENIED and the Decision of
the Court of Appeals dated 18 November 2005 and its Resolution dated 21 January 2006,

10
 THIRD DIVISION KILUSAN-OLALIA filed a protest.
G.R. No. 156668, November 23, 2007
KIMBERLY-CLARK (PHILS.), INC., PETITIONER, VS. SECRETARY OF LABOR, On November 13, 1986, MOLE issued an Order stating, among others, that the casual
AMBROCIO GRAVADOR, ENRICO PILI, PAQUITO GILBUENA, ROBERTO DEL MUNDO, workers not performing janitorial and yard maintenance services had attained regular
ALMARIO ROMINQUIT, ANTONIO BALANO, RIZALDY GAPUZ, RUFINO FELICIANO, status on even date. UKCEO-PTGWO was then declared as the exclusive bargaining
RESTITUTO DEAROZ, FERMIN BERNIL, DANIEL ISIDRO, LEOPOLDO SUNGA, representative of Kimberly’s employees, having garnered the highest number of votes in
ANTONIO SONGRONES, EDMUND MAPANOO, SALVADOR SAN MIGUEL, SANTOS the certification election.
CANTOS, JR., EMILIO DAGARAG, NOEL MULDONG, FELIXBERTO DELA CRUZ,
ALBERTO MANAHAN, LUNA ESPIRITU, DONATO BAQUILOD, FLORENCIO CORREA, On March 16, 1987, KILUSAN-OLALIA filed with this Court a petition for certiorari which
CAMILO LEONARDO, GENER MANGIBUNOG, REYNALDO MIRANDA, ARNEL ZULUETA, was docketed as G.R. No. 77629 assailing the Order of the MOLE with prayer for a
PEDRO ODEVILLAS, CONRADO DICHOSO, NELSON ALAMO, ROMEO LIGUAN, temporary restraining order (TRO).
RAYCHARD CARNAJE, FELINO GUANEZ, ANTONIO MARTIN, WALLYFREDO ALZONA,
VICTOR ABANDO, ALFREDO AUSTRIA, NESTOR SEPRADO, RICHARD GILBUENA, During the pendency of G.R. No. 77629, Kimberly dismissed from service several
EDWIN SILAYCO, JOSEPH MARCOS, NOEL OMALIN, DANILO DORADO, LUISITO DE employees and refused to heed the workers’ grievances, impelling KILUSAN-OLALIA to
JESUS, EFREN SUMAGUE, CARLOS PILI, MIGUELITO ROA, AND KILUSAN-OLALIA, AND stage a strike on May 17, 1987. Kimberly filed an injunction case with the National Labor
SHERIFF P. PAREDES, RESPONDENTS. Relations Commission (NLRC), which prompted the latter to issue temporary restraining
orders (TRO’s). The propriety of the issuance of the TRO’s was again brought by
DECISION KILUSAN-OLALIA to this Court via a petition for certiorari and prohibition which was
NACHURA, J.: docketed as G.R. No. 78791.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court G.R. Nos. 77629 and 78791 were eventually consolidated by this Court and decided on
assailing the June 27, 2002 Decision[1] of the appellate court in CA-G.R. SP No. 62257, and May 9, 1990. The dispositive portion of the decision reads as follows:
the January 8, 2003 Resolution[2] denying the motion for reconsideration thereof. WHEREFORE, judgment is hereby rendered in G.R. No. 77629:

On the recommendation of the Division Clerk of Court and in the interest of orderly Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the
administration of justice, the Court initially consolidated this case with G.R. Nos. 149158- 64 challenged votes, and that the union with the highest number of votes be
59 entitled Kimberly Independent Labor Union for Solidarity Activism and Nationalism thereafter declared as the duly elected certified bargaining representative of
(KILUSAN)-Organized Labor Associations in Line Industries and Agriculture (OLALIA), et al. the regular employees of KIMBERLY;
v. Court of Appeals, et al. We, however, already disposed of the issue in G.R. Nos. 149158-
59 in the Court's Resolution promulgated on July 24, 2007. [3] Left for the Court to resolve Ordering KIMBERLY to pay the workers who have been regularized their
then are the matters raised in the instant petition. differential pay with respect to minimum wage, cost of living allowance, 13th
month pay, and benefits provided for under the applicable collective
We pertinently quote from the said July 24, 2007 Resolution the facts, thus: bargaining agreement from the time they became regular employees.
On June 30, 1986, the Collective Bargaining Agreement (CBA) executed by and between
Kimberly-Clark (Phils.), Inc., (Kimberly), a Philippine-registered corporation engaged in All other aspects of the decision appealed from, which are not so modified or
the manufacture, distribution, sale and exportation of paper products, and United affected thereby, are hereby AFFIRMED. The temporary restraining order
Kimberly-Clark Employees Union-Philippine Transport and General Workers’ issued in G.R. No. 77629 is hereby made permanent.
Organization (UKCEO-PTGWO) expired. Within the freedom period, on April 21, 1986,
KILUSAN-OLALIA, then a newly-formed labor organization, challenged the incumbency of The petition filed in G.R. No. 78791 is hereby DISMISSED.
UKCEO-PTGWO, by filing a petition for certification election with the Ministry (now
Department) of Labor and Employment (MOLE), Regional Office No. IV, Quezon City. SO ORDERED.
xxxx
A certification election was subsequently conducted on July 1, 1986 with UKCEO-PTGWO
winning by a margin of 20 votes over KILUSAN-OLALIA. Remaining as uncounted were On the Decision of the Court dated May 9, 1990, KILUSAN-OLALIA and 76 individual
64 challenged ballots cast by 64 casual workers whose regularization was in question. complainants filed a motion for execution with the DOLE (formerly MOLE). In an Order

11
issued on June 29, 2000, the DOLE considered as physically impossible, and moot and WHEREFORE, the instant petition is DISMISSED for failure to show grave abuse of
academic the opening and counting of the 64 challenged ballots because they could no discretion. The questioned orders dated June 29, 2000 and December 6, 2000 of the
longer be located despite diligent efforts, and KILUSAN-OLALIA no longer actively Secretary of Labor are AFFIRMED. Costs against petitioners.
participated when the company went through another CBA cycle. However, the DOLE
ordered the payment of the differential wages and other benefits of the regularized SO ORDERED.
workers, to wit:
With the denial of its motion for reconsideration, Kimberly elevated the case before this
ACCORDINGLY, let a partial writ of execution issue to enforce payment of the sum of (sic) Court, on the following grounds:
P576,510.57 to the 22 individual workers listed in ANNEX A of Kimberly’s
Comment/Reply dated 31 October 1991 representing their differential pay with respect 1 The Court of Appeals committed serious error in affirming the ruling of the Secretary
to the minimum wage, cost of living allowance, 13th month pay and benefits provided of Labor that even casual employees who had not rendered one year of service
under the applicable collective bargaining agreement from the time they became regular were considered regular employees, thereby nullifying and disregarding the
employees as above-indicated. Honorable Court’s Decision dated May 9, 1990 that only casual employees who
had rendered at least one (1) year of service were considered regular
Further, the Bureau of Working Conditions is hereby directed to submit, within twenty employees.
(20) days from receipt of this Order, a list of workers who have been regularized and the
corresponding benefits owing to them from the time they became regular employees. 2 The Court of Appeals also gravely erred in upholding the ruling of Labor Secretary that
persons not party to the petition in G.R. No. 77629 were entitled to
SO ORDERED. regularization differentials, thereby amending the Honorable Court’s decision.
[4]

Pursuant thereto, on August 1, 2000, the Bureau of Working Conditions (BWC) submitted Kimberly, in this case, contends that the reckoning point in determining who among its
its report finding 47 out of the 76 complainants as entitled to be regularized. casual employees are entitled to regularization should be April 21, 1986, the date
KILUSAN-OLALIA filed a petition for certification election to challenge the incumbency of
Kimberly filed a motion for reconsideration of the DOLE Order as well as the BWC Report, UKCEO-PTGWO. It posits that in the implementation of the May 9, 1990 Decision in G.R.
arguing in the main that the decision in G.R. Nos. 77629 and 78791 only pertained to No. 77629,[5] the DOLE should then exclude the employees who had not rendered at least
casuals who had rendered one year of service as of April 21, 1986, the filing date of one (1) year of service from the said date.[6]
KILUSAN-OLALIA’s petition for certification election. On December 6, 2000, however, the
DOLE denied the motion, disposing of it as follows: Kimberly also argues that the employees who are not parties in G.R. No. 77629 should not
be included in the implementation orders. For DOLE to declare this group of employees
WHEREFORE, the motion for reconsideration filed by the COMPANY is hereby DENIED as regular and to order the payment of differential pay to them is to amend a final and
for lack of merit. No further motion of the same nature shall be entertained. Further, the executory decision of this Court.[7]
Report of computation submitted by the Bureau of Working Conditions is hereby
APPROVED and made an integral part of this Order. We do not agree. In G.R. No. 77629, we ruled as follows:
The law [thus] provides for two kinds of regular employees, namely: (1) those who are
Let a writ of execution be issued immediately. engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and (2) those who have rendered at least one year of
SO ORDERED. service, whether continuous or broken, with respect to the activity in which they are
employed. The individual petitioners herein who have been adjudged to be regular
Kimberly, steadfast in its stand, filed a petition for certiorari before the appellate court, employees fall under the second category. These are the mechanics, electricians,
which was docketed as CA-G.R. SP No. 62257 alleging that the employees who were machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters
dismissed due to the illegal strike staged on May 17, 1987 (the subject of G.R. Nos. and masons. It is not disputed that these workers have been in the employ of KIMBERLY
149158-59) should not be awarded regularization differentials. for more than one year at the time of the filing of the petition for certification election by
KILUSAN-OLALIA.
On June 27, 2002, the CA dismissed Kimberly’s petition, and disposed of the case as
follows: Owing to their length of service with the company, these workers became regular

12
employees, by operation of law, one year after they were employed by KIMBERLY properly appreciated.[15] Likewise, the appellate court cannot substitute its own judgment
through RANK. While the actual regularization of these employees entails the mechanical or criterion for that of the labor tribunal in determining wherein lies the weight of
act of issuing regular appointment papers and compliance with such other operating evidence or what evidence is entitled to belief.[16]
procedures as may be adopted by the employer, it is more in keeping with the intent and
spirit of the law to rule that the status of regular employment attaches to the casual WHEREFORE, premises considered, the petition for review on certiorari is DENIED DUE
worker on the day immediately after the end of his first year of service. To rule otherwise, COURSE.
and to instead make their regularization dependent on the happening of some
contingency or the fulfillment of certain requirements, is to impose a burden on the SO ORDERED.
employee which is not sanctioned by law.
Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.
That the first stated position is the situation contemplated and sanctioned by law is
further enhanced by the absence of a statutory limitation before regular status can be
acquired by a casual employee. The law is explicit. As long as the employee has rendered
at least one year of service, he becomes a regular employee with respect to the activity in
which he is employed. The law does not provide the qualification that the employee must
first be issued a regular appointment or must first be formally declared as such before he
can acquire a regular status. Obviously, where the law does not distinguish, no distinction
should be drawn.[8]
Considering that an employee becomes regular with respect to the activity in which he is
employed one year after he is employed, the reckoning date for determining his
regularization is his hiring date. Therefore, it is error for petitioner Kimberly to claim that
it is from April 21, 1986 that the one-year period should be counted. While it is a fact that
the issue of regularization came about only when KILUSAN-OLALIA filed a petition for
certification election, the concerned employees attained regular status by operation of
law.[9]

Further, the grant of the benefit of regularization should not be limited to the employees
who questioned their status before the labor tribunal/court and asserted their rights; it
should also extend to those similarly situated. [10] There is, thus, no merit in petitioner's
contention that only those who presented their circumstances of employment to the
courts are entitled to regularization.[11]

As to Kimberly’s assertions that some of the employees were already recalled, reassigned
or replaced by the RANK Manpower Services, and that some did not return to work, the
Court notes that these are questions of fact. Basic is the rule that, in petitions for review
on certiorari under Rule 45 of the Rules of Court, only questions of law may be raised, [12]
except, if the factual findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings
culled by the court of origin,[13] which is not so in the instant case. The DOLE and the
appellate court herein are uniform in their findings.

Finally, oft-repeated is the rule that appellate courts accord the factual findings of the
labor tribunal not only respect but also finality when supported by substantial evidence,
[14]
unless there is showing that the labor tribunal arbitrarily disregarded evidence before
it or misapprehended evidence of such nature as to compel a contrary conclusion if

13
 SECOND DIVISION After due proceedings, the Labor Arbiter dismissed the complaint for lack of merit, but
G.R. No. 167310, June 17, 2008 directed that Peninsula pay Alipio separation pay amounting to P20,000. The Labor
PENINSULA MANILA, ROLF PFISTERER AND BENILDA QUEVEDO-SANTOS, Arbiter held,
PETITIONERS, ELAINE M. ALIPIO, RESPONDENT.
WHEREFORE, in view of the foregoing, judgment is hereby rendered DISMISSING the
DECISION instant complaint for lack of merit. However, considering that complainant had served as
reliever for respondent hotel for a long period, the respondent hotel is ordered to give
QUISUMBING, J.: her separation pay equivalent to one-half month pay for every year of complainant's
reliever service, in the total amount of P20,000.00 based on an average monthly pay of
For review on certiorari are the Decision [1] dated August 23, 2004 and Resolution [2] dated P8,000.00.
March 11, 2005 of the Court of Appeals in CA-G.R. SP No. 67007, which reversed the
Decision [3] dated December 29, 2000 of the National Labor Relations Commission (NLRC) SO ORDERED.[5]
in NLRC NCR CA No. 023890-00. The NLRC had earlier affirmed with modification the
Labor Arbiter's Decision, [4] dismissing the complaint for illegal dismissal against herein On appeal, the NLRC affirmed with modification the Labor Arbiter's decision, to wit:
petitioners, but awarding respondent herein separation pay amounting to P20,000.
WHEREFORE, the appeal of the complainant is dismissed for lack of merit. Accordingly,
The pertinent facts are as follows: the decision appealed from is affirmed with the modification that the award of separation
pay is hereby deleted.
Petitioner, The Peninsula Manila, is a corporation engaged in the hotel business. Co-
petitioners Rolf Pfisterer and Benilda Quevedo-Santos were the general manager and SO ORDERED.[6]
human resources manager, respectively, of the hotel at the time of the controversy.
Upon further review, the Court of Appeals reversed the decision of the NLRC after
The hotel operates a clinic 24 hours a day and employs three regular nurses who work ascertaining that the findings of the Labor Arbiter and the NLRC that Alipio is not an
eight hours each day on three separate shifts. The hotel also engages the services of employee of Peninsula and that she was validly dismissed is not supported by the
reliever nurses who substitute for the regular nurses who are either off-duty or absent. evidence on record.[7] The dispositive portion of the Decision dated August 23, 2004 of
Respondent Elaine M. Alipio was hired merely as a reliever nurse. However, she had been the Court of Appeals reads:
performing the usual tasks and functions of a regular nurse since the start of her
employment on December 11, 1993. Hence, after about four years of employment in the WHEREFORE, the petition is GRANTED and the Decision dated December 29, 2000 and
hotel, she inquired why she was not receiving her 13 th month pay. the Order dated June 29, 2001 of the National Labor Relations Commission are
REVERSED and SET ASIDE.
In response, petitioners required her to submit a summary of her tour of duty for 1997.
After she had submitted the said summary, Alipio was paid P8,000 as her 13 th month pay Private respondents The Peninsula Manila and Benilda Quevedo-Santos are ordered to
for 1997. Alipio likewise requested for the payment of her 13th month pay for 1993 to reinstate petitioner Elaine M. Alipio as regular staff nurse without loss of seniority rights;
1996, but her request was denied. to pay petitioner, jointly and severally, full backwages and all the benefits to which she is
entitled under the Labor Code from December 12, 1994 up to the time of her actual
On December 18, 1998, Alipio was informed by a fellow nurse that she can only report for reinstatement; moral damages in the amount of P30,000.00, exemplary damages in the
work after meeting up with petitioner Santos. When Alipio met with Santos on December amount of P20,000[.]00, and attorney's fees equivalent to ten (10%) percent of the total
21, 1998, Alipio was asked regarding her payslip vouchers. She told Santos that she made monetary award.
copies of her payslip vouchers because Peninsula does not give her copies of the same.
Santos was peeved with Alipio's response because the latter was allegedly not entitled to Let this case be remanded to the Labor Arbitration Branch, National Labor Relations
get copies of her payslip vouchers. Santos likewise directed Alipio not to report for work Commission for the computation of the monetary claims of petitioner.
anymore.
SO ORDERED.[8] (Emphasis supplied.)
Aggrieved, Alipio filed a complaint for illegal dismissal against the petitioners.
Petitioners moved for reconsideration but their motion was denied. Hence, the instant

14
petition for review on certiorari contending that the Court of Appeals seriously erred: The conclusions reached by the NLRC and the Labor Arbiter, that Alipio was not a regular
employee of the hotel and that she was validly dismissed, are not supported by law and
I. evidence on record.

IN GIVING DUE COURSE TO THE RESPONDENT'S PETITION FOR CERTIORARI WHICH Article 280 of the Labor Code provides:
WAS MAINLY BASED ON ALLEGATIONS OF SUPPOSED FACTUAL ERRORS COMMITTED
BY THE NATIONAL LABOR RELATIONS COMMISSION AND IN REVERSING THE LATTER'S ART. 280. Regular and Casual Employment. -- The provisions of written agreement to the
FINDINGS OF FACT WHICH WERE SUPPORTED BY SUBSTANTIAL EVIDENCE IN THE contrary notwithstanding and regardless of the oral agreement of the parties, an
RECORD; AND employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
II. or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
IN DECLARING THE RESPONDENT'S DISMISSAL TO BE ILLEGAL AND ORDERING HER the time of the engagement of the employee or where the work or services to be
REINSTATEMENT WITH FULL BACK WAGES, TOGETHER WITH PAYMENT OF MORAL performed is seasonal in nature and the employment is for the duration of the season.
AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES. [9]
An employment shall be deemed to be casual if it is not covered by the preceding
Petitioners contend that the Court of Appeals should have accorded the unanimous paragraph: Provided, That, any employee who has rendered at least one year of
findings of the Labor Arbiter and the NLRC due respect and finality as the conclusion service, whether such service is continuous or broken, shall be considered a
reached by the two bodies is supported by substantial evidence on record. Petitioners regular employee with respect to the activity in which he is employed and his
insist Alipio was terminated for a just cause and with due process. Petitioners likewise employment shall continue while such activity exists. (Emphasis supplied.)
argue that Alipio cannot be reinstated as a regular staff nurse because (1) she never
served in that capacity; and (2) there is no vacancy for the said position or any equivalent Thus, an employment is deemed regular when the activities performed by the employee
position to which she may be reinstated. are usually necessary or desirable in the usual business of the employer. However, any
employee who has rendered at least one year of service, even though intermittent, is
Alipio, for her part, counters that the NLRC decision, affirming that of the Labor Arbiter, is deemed regular with respect to the activity performed and while such activity actually
not beyond the scope of judicial review because palpable mistake was committed in exists.[11]
disregarding evidence showing (1) her status as a regular employee of Peninsula; and (2)
petitioners' failure to observe substantive and procedural due process. She points out In this case, records show that Alipio's services were engaged by the hotel intermittently
that a Certification dated April 22, 1997 issued by the hotel proves she was a regular staff from 1993 up to 1998. Her services as a reliever nurse were undoubtedly necessary and
nurse until her illegal dismissal. She stresses that her supposed employment at the desirable in the hotel's business of providing comfortable accommodation to its guests. In
Quezon City Medical Center does not negate the fact that she also worked as a regular any case, since she had rendered more than one year of intermittent service as a reliever
nurse of the hotel. Additionally, she contends that obtaining copies of her own payslips nurse at the hotel, she had become a regular employee as early as December 12, 1994.
does not indicate a perverse attitude justifying dismissal for serious misconduct or willful Lastly, per the hotel's own Certification dated April 22, 1997, she was already a "regular
disobedience. She adds, there is no showing that her refusal to return copies of her staff nurse" until her dismissal.
payslips caused material damage to petitioners. She further claims that bad faith attended
her dismissal. Being a regular employee, Alipio enjoys security of tenure. Her services may be
terminated only upon compliance with the substantive and procedural requisites for a
After carefully weighing the parties' arguments, we resolve to deny the petition. valid dismissal: (1) the dismissal must be for any of the causes provided in Article 282 [12]
of the Labor Code; and (2) the employee must be given an opportunity to be heard and to
It is doctrinal that the factual findings of quasi-judicial agencies like the NLRC are defend himself.[13]
generally accorded respect and finality if such are supported by substantial evidence. In Did Alipio commit serious misconduct when she obtained copies of her payslips?
some instances, however, the Court may be compelled to deviate from this general rule if
the Labor Arbiter and the NLRC misappreciated the facts, thereby resulting in the We have defined misconduct as any forbidden act or dereliction of duty. It is willful in
impairment of the worker's constitutional and statutory right to security of tenure. [10] character and implies a wrongful intent, not a mere error in judgment. The misconduct, to
be serious, must be grave and not merely trivial. [14]

15
 THIRD DIVISION
In this case, Alipio's act of obtaining copies of her payslips cannot be characterized as a G.R. NO. 167714, March 07, 2007
misconduct, much less a grave misconduct. On the contrary, we find it absurd that she ROWELL INDUSTRIAL CORPORATION, PETITIONER, VS. HON. COURT OF APPEALS
had to resort to her own resourcefulness to get hold of these documents since it was AND JOEL TARIPE, RESPONDENTS.
incumbent upon Peninsula, as her employer, to give her copies of her payslips as a matter DECISION
of course. We are thus convinced that Alipio's dismissal was not based on a just cause. CHICO-NAZARIO, J.:

Was Alipio afforded an opportunity to be heard and to defend herself? This case is a Petition for Review under Rule 45 of the 1997 Revised Rules of Civil
Procedure seeking to set aside the Decision [1] and Resolution[2] of the Court of Appeals in
When Santos had a meeting with Alipio on December 21, 1998, she was not informed that CA-G.R. SP No. 74104, entitled, Rowell Industrial Corp., and/or Edwin Tang vs. National
the hotel was contemplating her dismissal. Neither was she informed of the ground for Labor Relations Commission and Joel Taripe, dated 30 September 2004 and 1 April 2005,
which her dismissal was sought. She was simply told right there and then that she was respectively, which affirmed the Resolutions[3] of the National Labor Relations
already dismissed, thereby affording no opportunity for her to be heard and defend Commission (NLRC) dated 7 June 2002 and 20 August 2002, finding herein respondent
herself. Thus, Alipio was likewise deprived of procedural due process. Joel Taripe (Taripe) as a regular employee who had been illegally dismissed from
employment by herein petitioner Rowell Industrial Corp. (RIC), thereby ordering
Clearly, Alipio was illegally dismissed because petitioners failed on both counts to comply petitioner RIC to reinstate respondent Taripe with full backwages, subject to the
with the twin requisites for a valid termination. She is thus entitled to reinstatement modification of exonerating Edwin Tang, the RIC General Manager and Vice President,
without loss of seniority rights and other privileges and to full backwages, inclusive of from liability and computing the backwages of herein respondent Taripe based on the
allowances, and to other benefits, or their monetary equivalent computed from the time prevailing salary rate at the time of his dismissal. The NLRC Resolutions reversed the
compensation was withheld up to the time of actual reinstatement.[15] Should Decision [4] of the Labor Arbiter dated 29 September 2000, which dismissed respondent
reinstatement be no longer feasible, Alipio is entitled to separation pay equivalent to one Taripe's complaint.
month pay for her every year of service in lieu of reinstatement.[16]
Furthermore, as a rule, moral damages are recoverable where the dismissal of the Petitioner RIC is a corporation engaged in manufacturing tin cans for use in packaging of
employee was attended with bad faith or was done in a manner contrary to good consumer products, e.g., foods, paints, among other things. Respondent Taripe was
customs.[17] Exemplary damages may also be awarded if the dismissal is effected in a employed by petitioner RIC on 8 November 1999 as a "rectangular power press machine
wanton, oppressive or malevolent manner.[18] operator" with a salary of P223.50 per day, until he was allegedly dismissed from his
employment by the petitioner on 6 April 2000.
In this case, while the petitioners issued a Certification dated April 22, 1997 and
recognized Alipio as a regular employee, they deprived her of copies of her own payslips. The controversy of the present case arose from the following facts, as summarized by the
Moreover, her dismissal was effected in a manner whereby she was deprived of due NLRC and the Court of Appeals:
process. Under these circumstances, she is also entitled to moral damages in the amount
of P15,000 and exemplary damages in the amount of P10,000. On [17 February 2000], [herein respondent Taripe] filed a [C]omplaint against [herein
Lastly, the award of attorney's fees equivalent to ten percent (10%) of the total monetary petitioner RIC] for regularization and payment of holiday pay, as well as indemnity for
award is consistent with prevailing jurisprudence [19] and thus ought to be affirmed. severed finger, which was amended on [7 April 2000] to include illegal dismissal.
[Respondent Taripe] alleges that [petitioner RIC] employed him starting [8 November
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated 1999] as power press machine operator, such position of which was occupied by
August 23, 2004 and Resolution dated March 11, 2005 of the Court of Appeals in CA-G.R. [petitioner RIC's] regular employees and the functions of which were necessary to the
SP No. 67007 are hereby AFFIRMED as MODIFIED, such that the amount of moral latter's business. [Respondent Taripe] adds that upon employment, he was made to sign a
damages is reduced to only P15,000 and the exemplary damages to only P10,000. document, which was not explained to him but which was made a condition for him to be
No pronouncement as to costs. taken in and for which he was not furnished a copy. [Respondent Taripe] states that he
was not extended full benefits granted under the law and the [Collective Bargaining
SO ORDERED. Agreement] and that on [6 April 2000], while the case for regularization was pending, he
was summarily dismissed from his job although he never violated any of the [petitioner
Tinga, Reyes, Leonardo-De Castro, and Brion, JJ., concur. RIC's] company rules and regulations.

16
[Petitioner RIC], for [its] part, claim[s] that [respondent Taripe] was a contractual Rules of Civil Procedure before the Court of Appeals with the following assignment of
employee, whose services were required due to the increase in the demand in packaging errors:
requirement of [its] clients for Christmas season and to build up stock levels during the
early part of the following year; that on [6 March 2000], [respondent Taripe's] I. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS
employment contract expired. [Petitioner RIC] avers that the information update for JURISDICTION WHEN IT MISINTERPRETED ARTICLE 280 OF THE LABOR CODE AND
union members, which was allegedly filled up by [respondent Taripe] and submitted by IGNORED JURISPRUDENCE WHEN IT DECIDED THAT [RESPONDENT TARIPE] IS A
the Union to [petitioner] company, it is stated therein that in the six (6) companies where REGULAR EMPLOYEE AND THUS, ILLEGALLY DISMISSED.
[respondent Taripe] purportedly worked, the latter's reason for leaving was "finished
contract," hence, [respondent Taripe] has knowledge about being employed by contract II. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS
contrary to his allegation that the document he was signing was not explained to him. JURISDICTION WHEN IT ORDERED [EDWIN TANG] TO (sic) JOINTLY AND SEVERALLY
[Petitioner RIC] manifest[s] that all benefits, including those under the [Social Security LIABLE FOR MONETARY CLAIMS OF [RESPONDEN TARIPE].
System], were given to him on [12 May 2000].[5]
On 29 September 2000, the Labor Arbiter rendered a Decision dismissing respondent III. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS
Taripe's Complaint based on a finding that he was a contractual employee whose contract JURISDICTION WHEN IT ORDERED PAYMENT OF MONETARY CLAIMS COMPUTED ON
merely expired. The dispositive portion of the said Decision reads, thus: AN ERRONEOUS WAGE RATE.[8]

WHEREFORE, premises considered, judgment is hereby rendered declaring this The Court of Appeals rendered the assailed Decision on 30 September 2004, affirming the
complaint of [herein respondent Taripe] against [herein petitioner RIC] and Mr. Edwin Resolution of the NLRC dated 7 June 2002, with modifications. Thus, it disposed –
Tang for illegal dismissal DISMISSED for lack of merit. However, on ground of
compassionate justice, [petitioner RIC and Mr. Edwin Tang] are hereby ordered to pay WHEREFORE, the Resolutions dated [7 June 2002] and [20 August 2002] of [the NLRC]
[respondent Taripe] the sum of PHP5,811.00 or one month's salary as financial assistance are affirmed, subject to the modification that [Edwin Tang] is exonerated from liability
and holiday pay in the sum of PHP894.00, as well as attorney's fees of 10% based on and the computation of backwages of [respondent Taripe] shall be based on P223.50, the
holiday pay (Article 110, Labor Code).[6] last salary he received.[9]

Aggrieved, respondent Taripe appealed before the NLRC. In a Resolution dated 7 June A Motion for Reconsideration of the aforesaid Decision was filed by petitioner RIC, but
2002, the NLRC granted the appeal filed by respondent Taripe and declared that his the same was denied for lack of merit in a Resolution [10] of the Court of Appeals dated 1
employment with the petitioner was regular in status; hence, his dismissal was illegal. April 2005.
The decretal portion of the said Resolution reads as follows:
Hence, this Petition.
WHEREFORE, premises considered, [herein respondent Taripe's] appeal is GRANTED.
The Labor Arbiter's [D]ecision in the above-entitled case is hereby REVERSED. It is Petitioner RIC comes before this Court with the lone issue of whether the Court of
hereby declared that [respondent Taripe's] employment with [herein petitioner RIC and Appeals misinterpreted Article 280 of the Labor Code, as amended, and ignored
Mr. Edwin Tang] is regular in status and that he was illegally dismissed therefrom. jurisprudence when it affirmed that respondent Taripe was a regular employee and was
illegally dismissed.
[Petitioner RIC and Mr. Edwin Tang] are hereby ordered to reinstate [respondent Taripe]
and to jointly and severally pay him full backwages from the time he was illegally Petitioner RIC, in its Memorandum,[11] argues that the Court of Appeals had narrowly
dismissed up to the date of his actual reinstatement, less the amount of P1,427.67. The interpreted Article 280 of the Labor Code, as amended, and disregarded a contract
award of P894.00 for holiday pay is AFFIRMED but the award of P5,811.00 for financial voluntarily entered into by the parties.
assistance is deleted. The award for attorney's fees is hereby adjusted to ten percent
(10%) of [respondent Taripe's] total monetary award.[7] Petitioner RIC emphasizes that while an employee's status of employment is vested by
law pursuant to Article 280 of the Labor Code, as amended, said provision of law admits
Dissatisfied, petitioner RIC moved for the reconsideration of the aforesaid Resolution but of two exceptions, to wit: (1) those employments which have been fixed for a specific
it was denied in the Resolution of the NLRC dated 20 August 2002. project or undertaking, the completion or termination of which has been determined at
the time of the engagement of the employment; and (2) when the work or services to be
Consequently, petitioner filed a Petition for Certiorari under Rule 65 of the 1997 Revised performed are seasonal; hence, the employment is for the duration of the season. Thus,

17
there are certain forms of employment which entail the performance of usual and ART. 280. REGULAR AND CASUAL EMPLOYMENT. -The provisions of written
desirable functions and which exceed one year but do not necessarily qualify as regular agreement to the contrary notwithstanding and regardless of the oral agreement of the
employment under Article 280 of the Labor Code, as amended. parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
The Petition is unmeritorious. business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been
A closer examination of Article 280 of the Labor Code, as amended, is imperative to determined at the time of the engagement of the employee or where the work or services
resolve the issue raised in the present case. to be performed is seasonal in nature and the employment is for the duration of the
season.
In declaring that respondent Taripe was a regular employee of the petitioner and, thus,
his dismissal was illegal, the Court of Appeals ratiocinated in this manner: An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service,
In determining the employment status of [herein respondent Taripe], reference must be whether such service is continuous or broken, shall be considered a regular employee
made to Article 280 of the Labor Code, which provides: with respect to the activity in which he is employed and his employment shall continue
while such activity exists. [Emphasis supplied]
xxxx
Thus, there are two kinds of regular employees, namely: (1) those who are engaged to The aforesaid Article 280 of the Labor Code, as amended, classifies employees into three
perform activities which are usually necessary or desirable in the usual business or trade categories, namely: (1) regular employees or those whose work is necessary or
of the employer; and (2) those who have rendered at least one year of service, whether desirable to the usual business of the employer; (2) project employees or those whose
continuous or broken, with respect to the activity in which they are employed. employment has been fixed for a specific project or undertaking, the completion or
[Respondent Taripe] belonged to the first category of regular employees. termination of which has been determined at the time of the engagement of the employee
or where the work or services to be performed is seasonal in nature and the employment
The purported contract of employment providing that [respondent Taripe] was hired as is for the duration of the season; and (3) casual employees or those who are neither
contractual employee for five (5) months only, cannot prevail over the undisputed fact regular nor project employees.[13]
that [respondent Taripe] was hired to perform the function of power press operator, a
function necessary or desirable in [petitioner's] business of manufacturing tin cans. Regular employees are further classified into: (1) regular employees by nature of work;
[Herein petitioner RIC's] contention that the four (4) months length of service of and (2) regular employees by years of service.[14] The former refers to those employees
[respondent Taripe] did not grant him a regular status is inconsequential, considering who perform a particular activity which is necessary or desirable in the usual business or
that length of service assumes importance only when the activity in which the employee trade of the employer, regardless of their length of service; while the latter refers to those
has been engaged to perform is not necessary or desirable to the usual business or trade employees who have been performing the job, regardless of the nature thereof, for at
of the employer. least a year.[15]

As aptly ruled by [the NLRC]: The aforesaid Article 280 of the Labor Code, as amended, however, does not proscribe or
prohibit an employment contract with a fixed period. It does not necessarily follow that
"In the instant case, there is no doubt that [respondent Taripe], as power press operator, where the duties of the employee consist of activities usually necessary or desirable in
has been engaged to perform activities which are usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of
[petitioner RIC's] usual business or trade of manufacturing of tin cans for use in time for the performance of such activities. There is nothing essentially contradictory
packaging of food, paint and others. We also find that [respondent Taripe] does not fall between a definite period of employment and the nature of the employee's duties. [16]
under any of the abovementioned exceptions. Other that (sic) [petitioner RIC's] bare What Article 280 of the Labor Code, as amended, seeks to prevent is the practice of some
allegation thereof, [it] failed to present any evidence to prove that he was employed for a unscrupulous and covetous employers who wish to circumvent the law that protects
fixed or specific project or undertaking the completion of which has been determined at lowly workers from capricious dismissal from their employment. The aforesaid
the time of his engagement or that [respondent Taripe's] services are seasonal in nature provision, however, should not be interpreted in such a way as to deprive employers of
and that his employment was for the duration of the season." [12] the right and prerogative to choose their own workers if they have sufficient basis to
refuse an employee a regular status. Management has rights which should also be
Article 280 of the Labor Code, as amended, provides: protected.[17]

18
 In the present case, respondent Taripe, in need of a job, was compelled to agree to the
In the case at bar, respondent Taripe signed a contract of employment prior to his contract, including the five-month period of employment, just so he could be hired.
admission into the petitioner's company. Said contract of employment provides, among Hence, it cannot be argued that respondent Taripe signed the employment contract with
other things: a fixed term of five months willingly and with full knowledge of the impact thereof.

4. That my employment shall be contractual for the period of five (5) months which With regard to the second guideline, this Court agrees with the Court of Appeals that
means that the end of the said period, I can (sic) discharged unless this contract is petitioner RIC and respondent Taripe cannot be said to have dealt with each other on
renewed by mutual consent or terminated for cause. [18] more or less equal terms with no moral dominance exercised by the former over the
latter. As a power press operator, a rank and file employee, he can hardly be on equal
Based on the said contract, respondent Taripe's employment with the petitioner is good terms with petitioner RIC. As the Court of Appeals said, "almost always, employees agree
only for a period of five months unless the said contract is renewed by mutual consent. to any terms of an employment contract just to get employed considering that it is
And as claimed by petitioner RIC, respondent Taripe, along with its other contractual difficult to find work given their ordinary qualifications." [22]
employees, was hired only to meet the increase in demand for packaging materials during
the Christmas season and also to build up stock levels during the early part of the year. Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid
fixed term employment contract, it can be safely stated that the aforesaid contract signed
Although Article 280 of the Labor Code, as amended, does not forbid fixed term by respondent Taripe for a period of five months was a mere subterfuge to deny to the
employment, it must, nevertheless, meet any of the following guidelines in order that it latter a regular status of employment.
cannot be said to circumvent security of tenure: (1) that the fixed period of employment
was knowingly and voluntarily agreed upon by the parties, without any force, duress or Settled is the rule that the primary standard of determining regular employment is the
improper pressure being brought to bear upon the employee and absent any other reasonable connection between the particular activity performed by the employee in
circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and relation to the casual business or trade of the employer. The connection can be
employee dealt with each other on more or less equal terms with no moral dominance determined by considering the nature of the work performed and its relation to the
whatever being exercised by the former on the latter. [19] scheme of the particular business or trade in its entirety. [23]

In the present case, it cannot be denied that the employment contract signed by Given the foregoing, this Court agrees in the findings of the Court of Appeals and the
respondent Taripe did not mention that he was hired only for a specific undertaking, the NLRC that, indeed, respondent Taripe, as a rectangular power press machine operator, in
completion of which had been determined at the time of his engagement. The said charge of manufacturing covers for "four liters rectangular tin cans," was holding a
employment contract neither mentioned that respondent Taripe's services were seasonal position which is necessary and desirable in the usual business or trade of petitioner RIC,
in nature and that his employment was only for the duration of the Christmas season as which was the manufacture of tin cans. Therefore, respondent Taripe was a regular
purposely claimed by petitioner RIC. What was stipulated in the said contract was that employee of petitioner RIC by the nature of work he performed in the company.
respondent Taripe's employment was contractual for the period of five months.
Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the
Likewise, as the NLRC mentioned in its Resolution, to which the Court of Appeals agreed, Labor Code, as amended, because it was not proven by petitioner RIC that he was
other than the bare allegations of petitioner RIC that respondent Taripe was hired only employed only for a specific project or undertaking or his employment was merely
because of the increase in the demand for packaging materials during the Christmas seasonal. Similarly, the position and function of power press operator cannot be said to
season, petitioner RIC failed to substantiate such claim with any other evidence. be merely seasonal. Such position cannot be considered as only needed for a specific
Petitioner RIC did not present any evidence which might prove that respondent Taripe project or undertaking because of the very nature of the business of petitioner RIC.
was employed for a fixed or specific project or that his services were seasonal in nature. Indeed, respondent Taripe is a regular employee of petitioner RIC and as such, he cannot
be dismissed from his employment unless there is just or authorized cause for his
Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made dismissal.
to sign the contract of employment, prepared by petitioner RIC, as a condition for his
hiring. Such contract in which the terms are prepared by only one party and the other Well-established is the rule that regular employees enjoy security of tenure and they can
party merely affixes his signature signifying his adhesion thereto is called contract of only be dismissed for just cause and with due process, notice and hearing.[24] And in case
adhesion.[20] It is an agreement in which the parties bargaining are not on equal footing, of employees' dismissal, the burden is on the employer to prove that the dismissal was
the weaker party's participation being reduced to the alternative "to take it or leave it." [21] legal. Thus, respondent Taripe's summary dismissal, not being based on any of the just or

19
authorized causes enumerated under Articles 282,[25] 283,[26] and 284[27] of the Labor FIRST DIVISION
Code, as amended, is illegal. G.R. NO. 164156, September 26, 2006
ABS-CBN BROADCASTING CORPORATION, PETITIONER, VS. MARLYN NAZARENO,
Before concluding, we once more underscore the settled precept that factual findings of MERLOU GERZON, JENNIFER DEIPARINE, AND JOSEPHINE LERASAN, RESPONDENTS.
the NLRC, having deemed to acquire expertise in matters within its jurisdiction, are DECISION
generally accorded not only respect but finality especially when such factual findings are CALLEJO, SR., J.:
affirmed by the Court of Appeals;[28] hence, such factual findings are binding on this Court.
Before us is a petition for review on certiorari of the Decision[1] of the Court of Appeals
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision (CA) in CA-G.R. SP No. 76582 and the Resolution denying the motion for reconsideration
and Resolution of the Court of Appeals dated 30 September 2004 and 1 April 2005, thereof. The CA affirmed the Decision [2] and Resolution [3] of the National Labor Relations
respectively, which affirmed with modification the Resolutions of the NLRC dated 7 June Commission (NLRC) in NLRC Case No. V-000762-2001 (RAB Case No. VII-10-1661-2001)
2002 and 20 August 2002, respectively, finding herein respondent Taripe as a regular which likewise affirmed, with modification, the decision of the Labor Arbiter declaring
employee who had been illegally dismissed from employment by petitioner RIC, are the respondents Marlyn Nazareno, Merlou Gerzon, Jennifer Deiparine and Josephine
hereby AFFIRMED. Costs against petitioner RIC. Lerasan as regular employees.

SO ORDERED. The Antecedents

Ynares-Santiago, Austria-Martinez, and Nachura, JJ., concur. Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting
Callejo, Sr., J., on leave. business and owns a network of television and radio stations, whose operations revolve
around the broadcast, transmission, and relay of telecommunication signals. It sells and
deals in or otherwise utilizes the airtime it generates from its radio and television
operations. It has a franchise as a broadcasting company, and was likewise issued a
license and authority to operate by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as

production assistants (PAs) on different dates. They were assigned at the news and
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
monthly compensation of P4,000. They were issued ABS-CBN employees' identification
cards and were required to work for a minimum of eight hours a day, including Sundays
and holidays. They were made to perform the following tasks and duties:

a) Prepare, arrange airing of commercial broadcasting based on the daily operations log
and digicart of respondent ABS-CBN;
b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or
incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public service announcement and
complaints;
e) Assist, anchor program interview, etc; and
f) Record, log clerical reports, man based control radio. [4]
Their respective working hours were as follows:

Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7 ½
8:00 A.M.-12:00 noon

20
2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 ½ employees for a continuous period of more than five (5) years with a monthly salary rate
3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs. of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this complaint
9:00 A.M.-6:00 P.M. (WF) 9 hrs. on November 20, 2000.
4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.[5] Machine copies of complainants' ABS-CBN Employee's Identification Card and salary
vouchers are hereto attached as follows, thus:
The PAs were under the control and supervision of Assistant Station Manager Dante J.
Luzon, and News Manager Leo Lastimosa. I. Jennifer Deiparine:
Exhibit "A" - ABS-CBN Employee's Identification Card
On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a Exhibit "B", - ABS-CBN Salary Voucher from Nov.
Collective Bargaining Agreement (CBA) to be effective during the period from December Exhibit "B-1" & 1999 to July 2000 at P4,000.00
11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as Exhibit "B-2"
part of the bargaining unit, respondents were not included to the CBA. [6] Date employed: September 15, 1995
Length of service: 5 years & nine (9) months
On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing the II. Merlou Gerzon - ABS-CBN Employee's Identification Card
PAs that effective August 1, 2000, they would be assigned to non-drama programs, and Exhibit "C"
that the DYAB studio operations would be handled by the studio technician. Thus, their Exhibit "D"
revised schedule and other assignments would be as follows: Exhibit "D-1" &
Exhibit "D-2" - ABS-CBN Salary Voucher from March
Monday - Saturday 1999 to January 2001 at P4,000.00
4:30 A.M. - 8:00 A.M. - Marlene Nazareno. Date employed: September 1, 1995
Miss Nazareno will then be assigned at the Research Dept. Length of service: 5 years & 10 months
From 8:00 A.M. to 12:00 III. Marlene Nazareno
4:30 P.M. - 12:00 MN - Jennifer Deiparine Exhibit "E" - ABS-CBN Employee's Identification Card
Sunday Exhibit "E" - ABS-CBN Salary Voucher from Nov.
5:00 A.M. - 1:00 P.M. - Jennifer Deiparine Exhibit "E-1" & 1999 to December 2000
1:00 P.M. - 10:00 P.M. - Joy Sanchez Exhibit :E-2"
Respondent Gerzon was assigned as the full-time PA of the TV News Department Date employed: April 17, 1996
reporting directly to Leo Lastimosa. Length of service: 5 years and one (1) month
IV. Joy Sanchez Lerasan
On October 12, 2000, respondents filed a Complaint for Recognition of Regular Exhibit "F" - ABS-CBN Employee's Identification Card
Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Exhibit "F-1" - ABS-CBN Salary Voucher from Aug.
Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner Exhibit "F-2" & 2000 to Jan. 2001
before the NLRC. The Labor Arbiter directed the parties to submit their respective Exhibit "F-3"
position papers. Upon respondents' failure to file their position papers within the Exhibit "F-4" - Certification dated July 6, 2000
reglementary period, Labor Arbiter Jose G. Gutierrez issued an Order dated Acknowledging regular status of
Complainant Joy Sanchez Lerasan
April 30, 2001, dismissing the complaint without prejudice for lack of interest to pursue Signed by ABS-CBN Administrative
the case. Respondents received a copy of the Order on May 16, 2001. [7] Instead of re-filing Officer May Kima Hife
their complaint with the NLRC within 10 days from May 16, 2001, they filed, on June 11, Date employed: April 15, 1998
2001, an Earnest Motion to Refile Complaint with Motion to Admit Position Paper and Length of service: 3 yrs. and one (1) month[9]
Motion to Submit Case For Resolution. [8] The Labor Arbiter granted this motion in an
Order dated June 18, 2001, and forthwith admitted the position paper of the Respondents insisted that they belonged to a "work pool" from which petitioner chose
complainants. Respondents made the following allegations: persons to be given specific assignments at its discretion, and were thus under its direct
supervision and control regardless of nomenclature. They prayed that judgment be
1. Complainants were engaged by respondent ABS-CBN as regular and full-time rendered in their favor, thus:

21
 6) Pangutana Lang
WHEREFORE, premises considered, this Honorable Arbiter is most respectfully prayed, to c. Complainant Gerzon assists in the program:
issue an order compelling defendants to pay complainants the following: 1) On Mondays and Tuesdays:
One Hundred Thousand Pesos (P100,000.00) each and by way of moral (a) Unzanith
damages; (b) Serbisyo de Arevalo
Minimum wage differential; (c) Arangkada (evening edition)
Thirteenth month pay differential; (d) Balitang K (local version)
Unpaid service incentive leave benefits; (e) Abante Sugbu
Sick leave; (f) Pangutana Lang
Holiday pay; 2) On Thursdays
Premium pay; Nagbagang Balita
Overtime pay; 3) On Saturdays
Night shift differential. (a) Nagbagang Balita
Complainants further pray of this Arbiter to declare them regular and permanent (b) Info Hayupan
employees of respondent ABS-CBN as a condition precedent for their admission into the (c) Arangkada (morning edition)
existing union and collective bargaining unit of respondent company where they may as (d) Nagbagang Balita (mid-day edition)
such acquire or otherwise perform their obligations thereto or enjoy the benefits due 4) On Sundays:
therefrom. (a) Siesta Serenata
(b) Sunday Chismisan
Complainants pray for such other reliefs as are just and equitable under the premises. [10] (c) Timbangan sa Hustisya
(d) Sayri ang Lungsod
For its part, petitioner alleged in its position paper that the respondents were PAs who (e) Haranahan[11]
basically assist in the conduct of a particular program ran by an anchor or talent. Among
their duties include monitoring and receiving incoming calls from listeners and field Petitioner maintained that PAs, reporters, anchors and talents occasionally "sideline" for
reporters and calls of news sources; generally, they perform leg work for the anchors other programs they produce, such as drama talents in other productions. As program
during a program or a particular production. They are considered in the industry as employees, a PA's engagement is coterminous with the completion of the program, and
"program employees" in that, as distinguished from regular or station employees, they may be extended/renewed provided that the program is on-going; a PA may also be
are basically engaged by the station for a particular or specific program broadcasted by assigned to new programs upon the cancellation of one program and the commencement
the radio station. Petitioner asserted that as PAs, the complainants were issued talent of another. As such program employees, their compensation is computed on a program
information sheets which are updated from time to time, and are thus made the basis to basis, a fixed amount for performance services irrespective of the time consumed. At any
determine the programs to which they shall later be called on to assist. The program rate, petitioner claimed, as the payroll will show, respondents were paid all salaries and
assignments of complainants were as follows: benefits due them under the law.[12]

a. Complainant Nazareno assists in the programs: Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA and
interpret the same, especially since respondents were not covered by the bargaining unit.
1) Nagbagang Balita (early morning edition)
2) Infor Hayupan On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents, and
3) Arangkada (morning edition) declared that they were regular employees of petitioner; as such, they were awarded
4) Nagbagang Balita (mid-day edition) monetary benefits. The fallo of the decision reads:
b. Complainant Deiparine assists in the programs:
1) Unzanith WHEREFORE, the foregoing premises considered, judgment is hereby rendered declaring
2) Serbisyo de Arevalo the complainants regular employees of the respondent ABS-CBN Broadcasting
3) Arangkada (evening edition) Corporation and directing the same respondent to pay complainants as follows:
4) Balitang K (local version) I - Merlou A. Gerzon P12,025.00
5) Abante Subu II - Marlyn Nazareno 12,025.00

22
III - Jennifer Deiparine 12,025.00 attorney's fees.[14]
IV - Josephine Sanchez Lerazan 12,025.00
____________ On November 14, 2002, the NLRC rendered judgment modifying the decision of the Labor
P48,100.00 Arbiter. The fallo of the decision reads:

plus ten (10%) percent Attorney's Fees or a TOTAL aggregate amount of PESOS: FIFTY WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez dated
TWO THOUSAND NINE HUNDRED TEN (P52,910.00). 30 July 2001 is SET ASIDE and VACATED and a new one is entered ORDERING
respondent ABS-CBN Broadcasting Corporation, as follows:
Respondent Veneranda C. Sy is absolved from any liability.
1. To pay complainants of their wage differentials and other benefits arising from
SO ORDERED.[13] the CBA as of 30 September 2002 in the aggregate amount of Two Million Five
Hundred, Sixty-One Thousand Nine Hundred Forty-Eight Pesos and 22/100
However, the Labor Arbiter did not award money benefits as provided in the CBA on his (P2,561,948.22), broken down as follows:
belief that he had no jurisdiction to interpret and apply the agreement, as the same was
within the jurisdiction of the Voluntary Arbitrator as provided in Article 261 of the Labor a. Deiparine, Jennifer - P 716,113.49
Code. b. Gerzon, Merlou - 716,113.49
Respondents' counsel received a copy of the decision on August 29, 2001. Respondent c. Nazareno, Marlyn - 716,113.49
Nazareno received her copy on August 27, 2001, while the other respondents received d. Lerazan, Josephine Sanchez - 413,607.75
theirs on September 8, 2001. Respondents signed and filed their Appeal Memorandum on Total - P 2,561,948.22
September 18, 2001.
2. To deliver to the complainants Two Hundred Thirty-Three (233) sacks of rice
For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter denied as of 30 September 2002 representing their rice subsidy in the CBA, broken
and considered as an appeal, conformably with Section 5, Rule V, of the NLRC Rules of down as follows:
Procedure. Petitioner forthwith appealed the decision to the NLRC, while respondents
filed a partial appeal. a. Deiparine, Jennifer - 60 Sacks
b. Gerzon, Merlou - 60 Sacks
In its appeal, petitioner alleged the following: c. Nazareno, Marlyn - 60 Sacks
d. Lerazan, Josephine Sanchez - 53 Sacks
That the Labor Arbiter erred in reviving or re-opening this case which had long Total 233 Sacks; and
been dismissed without prejudice for more than thirty (30) calendar days;
3. To grant to the complainants all the benefits of the CBA after 30 September
That the Labor Arbiter erred in depriving the respondent of its Constitutional 2002.
right to due process of law;
SO ORDERED.[15]
That the Labor Arbiter erred in denying respondent's Motion for
Reconsideration on an interlocutory order on the ground that the same is a The NLRC declared that the Labor Arbiter acted conformably with the Labor Code when it
prohibited pleading; granted respondents' motion to refile the complaint and admit their position paper.
Although respondents were not parties to the CBA between petitioner and the ABS-CBN
That the Labor Arbiter erred when he ruled that the complainants are regular Rank-and-File Employees Union, the NLRC nevertheless granted and computed
employees of the respondent; respondents' monetary benefits based on the 1999 CBA, which was effective until
September 2002. The NLRC also ruled that the Labor Arbiter had jurisdiction over the
That the Labor Arbiter erred when he ruled that the complainants are entitled complaint of respondents because they acted in their individual capacities and not as
to 13th month pay, service incentive leave pay and salary differential; and members of the union. Their claim for monetary benefits was within the context of Article
217(6) of the Labor Code. The validity of respondents' claim does not depend upon the
That the Labor Arbiter erred when he ruled that complainants are entitled to interpretation of the CBA.

23
The NLRC ruled that respondents were entitled to the benefits under the CBA because OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.
they were regular employees who contributed to the profits of petitioner through their
labor. The NLRC cited the ruling of this Court in New Pacific Timber & Supply Company v. 3 THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING
National Labor Relations Commission.[16] OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS. [18]

Petitioner filed a motion for reconsideration, which the NLRC denied. Considering that the assignments of error are interrelated, the Court shall resolve them
simultaneously.
Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court before Petitioner asserts that the appellate court committed palpable and serious error of law
the CA, raising both procedural and substantive issues, as follows: (a) whether the NLRC when it affirmed the rulings of the NLRC, and entertained respondents' appeal from the
acted without jurisdiction in admitting the appeal of respondents; (b) whether the NLRC decision of the Labor Arbiter despite the admitted lapse of the reglementary period
committed palpable error in scrutinizing the reopening and revival of the complaint of within which to perfect the same. Petitioner likewise maintains that the 10-day period to
respondents with the Labor Arbiter upon due notice despite the lapse of 10 days from appeal must be reckoned from receipt of a party's counsel, not from the time the party
their receipt of the July 30, 2001 Order of the Labor Arbiter; (c) whether respondents learns of the decision, that is, notice to counsel is notice to party and not the other way
were regular employees; (d) whether the NLRC acted without jurisdiction in entertaining around. Finally, petitioner argues that the reopening of a complaint which the Labor
and resolving the claim of the respondents under the CBA instead of referring the same to Arbiter has dismissed without prejudice is a clear violation of Section 1, Rule V of the
the Voluntary Arbitrators as provided in the CBA; and (e) whether the NLRC acted with NLRC Rules; such order of dismissal had already attained finality and can no longer be set
grave abuse of discretion when it awarded monetary benefits to respondents under the aside.
CBA although they are not members of the appropriate bargaining unit. Respondents, on the other hand, allege that their late appeal is a non-issue because it was
On February 10, 2004, the CA rendered judgment dismissing the petition. It held that the petitioner's own timely appeal that empowered the NLRC to reopen the case. They assert
perfection of an appeal shall be upon the expiration of the last day to appeal by all parties, that although the appeal was filed 10 days late, it may still be given due course in the
should there be several parties to a case. Since respondents received their copies of the interest of substantial justice as an exception to the general rule that the negligence of a
decision on September 8, 2001 (except respondent Nazareno who received her copy of counsel binds the client. On the issue of the late filing of their position paper, they
the decision on August 27, 2001), they had until September 18, 2001 within which to file maintain that this is not a ground to strike it out from the records or dismiss the
their Appeal Memorandum. Moreover, the CA declared that respondents' failure to complaint.
submit their position paper on time is not a ground to strike out the paper from the
records, much less dismiss a complaint. We find no merit in the petition.
Anent the substantive issues, the appellate court stated that respondents are not mere
project employees, but regular employees who perform tasks necessary and desirable in We agree with petitioner's contention that the perfection of an appeal within the
the usual trade and business of petitioner and not just its project employees. Moreover, statutory or reglementary period is not only mandatory, but also jurisdictional; failure to
the CA added, the award of benefits accorded to rank-and-file employees under the 1996- do so renders the assailed decision final and executory and deprives the appellate court
1999 CBA is a necessary consequence of the NLRC ruling that respondents, as PAs, are or body of the legal authority to alter the final judgment, much less entertain the appeal.
regular employees. However, this Court has time and again ruled that in exceptional cases, a belated appeal
may be given due course if greater injustice may occur if an appeal is not given due
Finding no merit in petitioner's motion for reconsideration, the CA denied the same in a course than if the reglementary period to appeal were strictly followed. [19] The Court
Resolution[17] dated June 16, 2004. resorted to this extraordinary measure even at the expense of sacrificing order and
efficiency if only to serve the greater principles of substantial justice and equity. [20]
Petitioner thus filed the instant petition for review on certiorari and raises the following
assignments of error: In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving
Article 223[21] of the Labor Code a liberal application to prevent the miscarriage of justice.
1 THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND Technicality should not be allowed to stand in the way of equitably and completely
GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS resolving the rights and obligations of the parties.[22] We have held in a catena of cases
COMMISSION NOTWITHSTANDING THE PATENT NULLITY OF THE LATTER'S that technical rules are not binding in labor cases and are not to be applied strictly if the
DECISION AND RESOLUTION. result would be detrimental to the workingman.[23]

2 THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING Admittedly, respondents failed to perfect their appeal from the decision of the Labor

24
Arbiter within the reglementary period therefor. However, petitioner perfected its appeal "A party may file a motion to revive or re-open a case dismissed without prejudice within
within the period, and since petitioner had filed a timely appeal, the NLRC acquired ten (10) calendar days from receipt of notice of the order dismissing the same; otherwise,
jurisdiction over the case to give due course to its appeal and render the decision of his only remedy shall be to re-file the case in the arbitration branch of origin."
November 14, 2002. Case law is that the party who failed to appeal from the decision of
the Labor Arbiter to the NLRC can still participate in a separate appeal timely filed by the the same is not a serious flaw that had prejudiced the respondents' right to due process.
adverse party as the situation is considered to be of greater benefit to both parties. [24] The case can still be refiled because it has not yet prescribed. Anyway, Article 221 of the
Labor Code provides:
We find no merit in petitioner's contention that the Labor Arbiter abused his discretion
when he admitted respondents' position paper which had been belatedly filed. It bears "In any proceedings before the Commission or any of the Labor Arbiters, the rules of
stressing that the Labor Arbiter is mandated by law to use every reasonable means to evidence prevailing in courts of law or equity shall not be controlling and it is the spirit
ascertain the facts in each case speedily and objectively, without technicalities of law or and intention of this Code that the Commission and its members and the Labor Arbiters
procedure, all in the interest of due process.[25] Indeed, as stressed by the appellate court, shall use every and all reasonable means to ascertain the facts in each case speedily and
respondents' failure to submit a position paper on time is not a ground for striking out objectively and without regard to technicalities of law or procedure, all in the interest of
the paper from the records, much less for dismissing a complaint. [26] Likewise, there is due process."
simply no truth to petitioner's assertion that it was denied due process when the Labor
Arbiter admitted respondents' position paper without requiring it to file a comment The admission by the Labor Arbiter of the complainants' Position Paper and
before admitting said position paper. The essence of due process in administrative Supplemental Manifestation which were belatedly filed just only shows that he acted
proceedings is simply an opportunity to explain one's side or an opportunity to seek within his discretion as he is enjoined by law to use every reasonable means to ascertain
reconsideration of the action or ruling complained of. Obviously, there is nothing in the the facts in each case speedily and objectively, without regard to technicalities of law or
records that would suggest that petitioner had absolute lack of opportunity to be heard. procedure, all in the interest of due process. Indeed, the failure to submit a position paper
[27]
Petitioner had the right to file a motion for reconsideration of the Labor Arbiter's on time is not a ground for striking out the paper from the records, much less for
admission of respondents' position paper, and even file a Reply thereto. In fact, petitioner dismissing a complaint in the case of the complainant. (University of Immaculate
filed its position paper on April 2, 2001. It must be stressed that Article 280 of the Labor Conception vs. UIC Teaching and Non-Teaching Personnel Employees, G.R. No. 144702,
Code was encoded in our statute books to hinder the circumvention by unscrupulous July 31, 2001).
employers of the employees' right to security of tenure by indiscriminately and
absolutely ruling out all written and oral agreements inharmonious with the concept of "In admitting the respondents' position paper albeit late, the Labor Arbiter acted within
regular employment defined therein.[28] her discretion. In fact, she is enjoined by law to use every reasonable means to ascertain
the facts in each case speedily and objectively, without technicalities of law or procedure,
We quote with approval the following pronouncement of the NLRC: all in the interest of due process". (Panlilio vs. NLRC, 281 SCRA 53).

The complainants, on the other hand, contend that respondents assailed the Labor The respondents were given by the Labor Arbiter the opportunity to submit position
Arbiter's order dated 18 June 2001 as violative of the NLRC Rules of Procedure and as paper. In fact, the respondents had filed their position paper on 2 April 2001. What is
such is violative of their right to procedural due process. That while suggesting that an material in the compliance of due process is the fact that the parties are given the
Order be instead issued by the Labor Arbiter for complainants to refile this case, opportunities to submit position papers.
respondents impliedly submit that there is not any substantial damage or prejudice upon
the refiling, even so, respondents' suggestion acknowledges complainants right to "Due process requirements are satisfied where the parties are given the opportunities to
prosecute this case, albeit with the burden of repeating the same procedure, thus, submit position papers". (Laurence vs. NLRC, 205 SCRA 737).
entailing additional time, efforts, litigation cost and precious time for the Arbiter to Thus, the respondent was not deprived of its Constitutional right to due process of law. [29]
repeat the same process twice. Respondent's suggestion, betrays its notion of prolonging,
rather than promoting the early resolution of the case. We reject, as barren of factual basis, petitioner's contention that respondents are
Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-opened considered as its talents, hence, not regular employees of the broadcasting company.
the dismissed case without prejudice beyond the ten (10) day reglementary period had Petitioner's claim that the functions performed by the respondents are not at all
inadvertently failed to follow Section 16, Rule V, Rules Procedure of the NLRC which necessary, desirable, or even vital to its trade or business is belied by the evidence on
states: record.

25
Case law is that this Court has always accorded respect and finality to the findings of fact The standard, supplied by the law itself, is whether the work undertaken is necessary or
of the CA, particularly if they coincide with those of the Labor Arbiter and the National desirable in the usual business or trade of the employer, a fact that can be assessed by
Labor Relations Commission, when supported by substantial evidence. [30] The question of looking into the nature of the services rendered and its relation to the general scheme
whether respondents are regular or project employees or independent contractors is under which the business or trade is pursued in the usual course. It is distinguished from
essentially factual in nature; nonetheless, the Court is constrained to resolve it due to its a specific undertaking that is divorced from the normal activities required in carrying on
tremendous effects to the legions of production assistants working in the Philippine the particular business or trade. But, although the work to be performed is only for a
broadcasting industry. specific project or seasonal, where a person thus engaged has been performing the job for
at least one year, even if the performance is not continuous or is merely intermittent, the
We agree with respondents' contention that where a person has rendered at least one law deems the repeated and continuing need for its performance as being sufficient to
year of service, regardless of the nature of the activity performed, or where the work is indicate the necessity or desirability of that activity to the business or trade of the
continuous or intermittent, the employment is considered regular as long as the activity employer. The employment of such person is also then deemed to be regular with respect
exists, the reason being that a customary appointment is not indispensable before one to such activity and while such activity exists. [34]
may be formally declared as having attained regular status. Article 280 of the Labor Code
provides: Not considered regular employees are "project employees," the completion or
termination of which is more or less determinable at the time of employment, such as
ART. 280. REGULAR AND CASUAL EMPLOYMENT.-The provisions of written agreement to those employed in connection with a particular construction project, and "seasonal
the contrary notwithstanding and regardless of the oral agreement of the parties, an employees" whose employment by its nature is only desirable for a limited period of
employment shall be deemed to be regular where the employee has been engaged to time. Even then, any employee who has rendered at least one year of service, whether
perform activities which are usually necessary or desirable in the usual business or trade continuous or intermittent, is deemed regular with respect to the activity performed and
of the employer except where the employment has been fixed for a specific project or while such activity actually exists.
undertaking the completion or termination of which has been determined at the time of It is of no moment that petitioner hired respondents as "talents." The fact that
the engagement of the employee or where the work or services to be performed is respondents received pre-agreed "talent fees" instead of salaries, that they did not
seasonal in nature and the employment is for the duration of the season. observe the required office hours, and that they were permitted to join other productions
In Universal Robina Corporation v. Catapang,[31] the Court reiterated the test in during their free time are not conclusive of the nature of their employment. Respondents
determining whether one is a regular employee: cannot be considered "talents" because they are not actors or actresses or radio
specialists or mere clerks or utility employees. They are regular employees who perform
The primary standard, therefore, of determining regular employment is the reasonable several different duties under the control and direction of ABS-CBN executives and
connection between the particular activity performed by the employee in relation to the supervisors.
usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection can Thus, there are two kinds of regular employees under the law: (1) those engaged to
be determined by considering the nature of work performed and its relation to the perform activities which are necessary or desirable in the usual business or trade of the
scheme of the particular business or trade in its entirety. Also, if the employee has been employer; and (2) those casual employees who have rendered at least one year of
performing the job for at least a year, even if the performance is not continuous and service, whether continuous or broken, with respect to the activities in which they are
merely intermittent, the law deems repeated and continuing need for its performance as employed. [35]
sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity and The law overrides such conditions which are prejudicial to the interest of the worker
while such activity exists.[32] whose weak bargaining situation necessitates the succor of the State. What determines
whether a certain employment is regular or otherwise is not the will or word of the
As elaborated by this Court in Magsalin v. National Organization of Working Men:[33] employer, to which the worker oftentimes acquiesces, much less the procedure of hiring
the employee or the manner of paying the salary or the actual time spent at work. It is the
Even while the language of law might have been more definitive, the clarity of its spirit character of the activities performed in relation to the particular trade or business taking
and intent, i.e., to ensure a "regular" worker's security of tenure, however, can hardly be into account all the circumstances, and in some cases the length of time of its performance
doubted. In determining whether an employment should be considered regular or non- and its continued existence.[36] It is obvious that one year after they were employed by
regular, the applicable test is the reasonable connection between the particular activity petitioner, respondents became regular employees by operation of law.[37]
performed by the employee in relation to the usual business or trade of the employer.

26
Additionally, respondents cannot be considered as project or program employees
because no evidence was presented to show that the duration and scope of the project Independent contractors often present themselves to possess unique skills, expertise or
were determined or specified at the time of their engagement. Under existing talent to distinguish them from ordinary employees. The specific selection and hiring of
jurisprudence, project could refer to two distinguishable types of activities. First, a project SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary
may refer to a particular job or undertaking that is within the regular or usual business of employees, is a circumstance indicative, but not conclusive, of an independent contractual
the employer, but which is distinct and separate, and identifiable as such, from the other relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-
undertakings of the company. Such job or undertaking begins and ends at determined or CBN would not have entered into the Agreement with SONZA but would have hired him
determinable times. Second, the term project may also refer to a particular job or through its personnel department just like any other employee.
undertaking that is not within the regular business of the employer. Such a job or
undertaking must also be identifiably separate and distinct from the ordinary or regular In any event, the method of selecting and engaging SONZA does not conclusively
business operations of the employer. The job or undertaking also begins and ends at determine his status. We must consider all the circumstances of the relationship, with the
determined or determinable times.[38] control test being the most important element.
The principal test is whether or not the project employees were assigned to carry out a
specific project or undertaking, the duration and scope of which were specified at the B. Payment of Wages
time the employees were engaged for that project. [39]
ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to
In this case, it is undisputed that respondents had continuously performed the same MJMDC. SONZA asserts that this mode of fee payment shows that he was an employee of
activities for an average of five years. Their assigned tasks are necessary or desirable in ABS- CBN. SONZA also points out that ABS-CBN granted him benefits and privileges
the usual business or trade of the petitioner. The persisting need for their services is "which he would not have enjoyed if he were truly the subject of a valid job contract."
sufficient evidence of the necessity and indispensability of such services to petitioner's
business or trade.[40] While length of time may not be a sole controlling test for project All the talent fees and benefits paid to SONZA were the result of negotiations that led to
employment, it can be a strong factor to determine whether the employee was hired for a the Agreement. If SONZA were ABS-CBN's employee, there would be no need for the
specific undertaking or in fact tasked to perform functions which are vital, necessary and parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay which
indispensable to the usual trade or business of the employer. [41] We note further that the law automatically incorporates into every employer-employee contract. Whatever
petitioner did not report the termination of respondents' employment in the particular benefits SONZA enjoyed arose from contract and not because of an employer-employee
"project" to the Department of Labor and Employment Regional Office having jurisdiction relationship.
over the workplace within 30 days following the date of their separation from work,
using the prescribed form on employees' termination/ dismissals/suspensions. [42] SONZA's talent fees, amounting to P317,000 monthly in the second and third year, are so
huge and out of the ordinary that they indicate more an independent contractual
As gleaned from the records of this case, petitioner itself is not certain how to categorize relationship rather than an employer-employee relationship. ABS-CBN agreed to pay
respondents. In its earlier pleadings, petitioner classified respondents as program SONZA such huge talent fees precisely because of SONZA'S unique skills, talent and
employees, and in later pleadings, independent contractors. Program employees, or project celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone
employees, are different from independent contractors because in the case of the latter, possessed enough bargaining power to demand and receive such huge talent fees for his
no employer-employee relationship exists. services. The power to bargain talent fees way above the salary scales of ordinary
employees is a circumstance indicative, but not conclusive, of an independent contractual
Petitioner's reliance on the ruling of this Court in Sonza v. ABS-CBN Broadcasting relationship.
Corporation[43] is misplaced. In that case, the Court explained why Jose Sonza, a well- The payment of talent fees directly to SONZA and not to MJMDC does not negate the
known television and radio personality, was an independent contractor and not a regular status of SONZA as an independent contractor. The parties expressly agreed on such
employee: mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to whom
A. Selection and Engagement of Employee MJMDC would have to turn over any talent fee accruing under the Agreement. [44]
ABS-CBN engaged SONZA'S services to co-host its television and radio programs because In the case at bar, however, the employer-employee relationship between petitioner and
of SONZA'S peculiar skills, talent and celebrity status. SONZA contends that the respondents has been proven.
"discretion used by respondent in specifically selecting and hiring complainant over
other broadcasters of possibly similar experience and qualification as complainant belies First. In the selection and engagement of respondents, no peculiar or unique skill, talent
respondent's claim of independent contractorship." or celebrity status was required from them because they were merely hired through

27
petitioner's personnel department just like any ordinary employee. to the benefits of the contract. To accord its benefits only to members of the union
without any valid reason would constitute undue discrimination against non-members. A
Second. The so-called "talent fees" of respondents correspond to wages given as a result collective bargaining agreement is binding on all employees of the company. Therefore,
of an employer-employee relationship. Respondents did not have the power to bargain whatever benefits are given to the other employees of ABS-CBN must likewise be
for huge talent fees, a circumstance negating independent contractual relationship. accorded to private respondents who were regular employees of petitioner. [48]
Besides, only talent-artists were excluded from the CBA and not production assistants
Third. Petitioner could always discharge respondents should it find their work who are regular employees of the respondents. Moreover, under Article 1702 of the New
unsatisfactory, and respondents are highly dependent on the petitioner for continued Civil Code: "In case of doubt, all labor legislation and all labor contracts shall be construed
work. in favor of the safety and decent living of the laborer."

Fourth. The degree of control and supervision exercised by petitioner over respondents IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
through its supervisors negates the allegation that respondents are independent assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582 are
contractors. AFFIRMED. Costs against petitioner.

The presumption is that when the work done is an integral part of the regular business of SO ORDERED.
the employer and when the worker, relative to the employer, does not furnish an
independent business or professional service, such work is a regular employment of such Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.
employee and not an independent contractor.[45] The Court will peruse beyond any such Panganiban, C. J. (Chairperson)., In the result.
agreement to examine the facts that typify the parties' actual relationship. [46]

It follows then that respondents are entitled to the benefits provided for in the existing
CBA between petitioner and its rank-and-file employees. As regular employees,
respondents are entitled to the benefits granted to all other regular employees of
petitioner under the CBA.[47] We quote with approval the ruling of the appellate court,
that the reason why production assistants were excluded from the CBA is precisely
because they were erroneously classified and treated as project employees by petitioner:

x x x The award in favor of private respondents of the benefits accorded to rank-and-file

employees of ABS-CBN under the 1996-1999 CBA is a necessary consequence of public
respondent's ruling that private respondents as production assistants of petitioner are
regular employees. The monetary award is not considered as claims involving the
interpretation or implementation of the collective bargaining agreement. The reason why
production assistants were excluded from the said agreement is precisely because they
were classified and treated as project employees by petitioner.
As earlier stated, it is not the will or word of the employer which determines the nature of
employment of an employee but the nature of the activities performed by such employee
in relation to the particular business or trade of the employer. Considering that We have
clearly found that private respondents are regular employees of petitioner, their
exclusion from the said CBA on the misplaced belief of the parties to the said agreement
that they are project employees, is therefore not proper. Finding said private respondents
as regular employees and not as mere project employees, they must be accorded the
benefits due under the said Collective Bargaining Agreement.

A collective bargaining agreement is a contract entered into by the union representing

the employees and the employer. However, even the non-member employees are entitled

28
 THIRD DIVISION 64 challenged ballots cast by 64 casual workers whose regularization was in question.
G.R. No. 156668, November 23, 2007 KILUSAN-OLALIA filed a protest.
KIMBERLY-CLARK (PHILS.), INC., PETITIONER, VS. SECRETARY OF LABOR,
AMBROCIO GRAVADOR, ENRICO PILI, PAQUITO GILBUENA, ROBERTO DEL MUNDO, On November 13, 1986, MOLE issued an Order stating, among others, that the casual
ALMARIO ROMINQUIT, ANTONIO BALANO, RIZALDY GAPUZ, RUFINO FELICIANO, workers not performing janitorial and yard maintenance services had attained regular
RESTITUTO DEAROZ, FERMIN BERNIL, DANIEL ISIDRO, LEOPOLDO SUNGA, status on even date. UKCEO-PTGWO was then declared as the exclusive bargaining
ANTONIO SONGRONES, EDMUND MAPANOO, SALVADOR SAN MIGUEL, SANTOS representative of Kimberly’s employees, having garnered the highest number of votes in
CANTOS, JR., EMILIO DAGARAG, NOEL MULDONG, FELIXBERTO DELA CRUZ, the certification election.
ALBERTO MANAHAN, LUNA ESPIRITU, DONATO BAQUILOD, FLORENCIO CORREA,
CAMILO LEONARDO, GENER MANGIBUNOG, REYNALDO MIRANDA, ARNEL ZULUETA, On March 16, 1987, KILUSAN-OLALIA filed with this Court a petition for certiorari which
PEDRO ODEVILLAS, CONRADO DICHOSO, NELSON ALAMO, ROMEO LIGUAN, was docketed as G.R. No. 77629 assailing the Order of the MOLE with prayer for a
RAYCHARD CARNAJE, FELINO GUANEZ, ANTONIO MARTIN, WALLYFREDO ALZONA, temporary restraining order (TRO).
VICTOR ABANDO, ALFREDO AUSTRIA, NESTOR SEPRADO, RICHARD GILBUENA,
EDWIN SILAYCO, JOSEPH MARCOS, NOEL OMALIN, DANILO DORADO, LUISITO DE During the pendency of G.R. No. 77629, Kimberly dismissed from service several
JESUS, EFREN SUMAGUE, CARLOS PILI, MIGUELITO ROA, AND KILUSAN-OLALIA, AND employees and refused to heed the workers’ grievances, impelling KILUSAN-OLALIA to
SHERIFF P. PAREDES, RESPONDENTS. stage a strike on May 17, 1987. Kimberly filed an injunction case with the National Labor
Relations Commission (NLRC), which prompted the latter to issue temporary restraining
DECISION orders (TRO’s). The propriety of the issuance of the TRO’s was again brought by
NACHURA, J.: KILUSAN-OLALIA to this Court via a petition for certiorari and prohibition which was
docketed as G.R. No. 78791.
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court G.R. Nos. 77629 and 78791 were eventually consolidated by this Court and decided on
assailing the June 27, 2002 Decision [1] of the appellate court in CA-G.R. SP No. 62257, and May 9, 1990. The dispositive portion of the decision reads as follows:
the January 8, 2003 Resolution[2] denying the motion for reconsideration thereof. WHEREFORE, judgment is hereby rendered in G.R. No. 77629:

On the recommendation of the Division Clerk of Court and in the interest of orderly Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the
administration of justice, the Court initially consolidated this case with G.R. Nos. 149158- 64 challenged votes, and that the union with the highest number of votes be
59 entitled Kimberly Independent Labor Union for Solidarity Activism and Nationalism thereafter declared as the duly elected certified bargaining representative of
(KILUSAN)-Organized Labor Associations in Line Industries and Agriculture (OLALIA), et al. the regular employees of KIMBERLY;
v. Court of Appeals, et al. We, however, already disposed of the issue in G.R. Nos. 149158-
59 in the Court's Resolution promulgated on July 24, 2007. [3] Left for the Court to resolve Ordering KIMBERLY to pay the workers who have been regularized their
then are the matters raised in the instant petition. differential pay with respect to minimum wage, cost of living allowance, 13th
month pay, and benefits provided for under the applicable collective
We pertinently quote from the said July 24, 2007 Resolution the facts, thus: bargaining agreement from the time they became regular employees.

On June 30, 1986, the Collective Bargaining Agreement (CBA) executed by and between All other aspects of the decision appealed from, which are not so modified or
Kimberly-Clark (Phils.), Inc., (Kimberly), a Philippine-registered corporation engaged in affected thereby, are hereby AFFIRMED. The temporary restraining order
the manufacture, distribution, sale and exportation of paper products, and United issued in G.R. No. 77629 is hereby made permanent.
Kimberly-Clark Employees Union-Philippine Transport and General Workers’
Organization (UKCEO-PTGWO) expired. Within the freedom period, on April 21, 1986, The petition filed in G.R. No. 78791 is hereby DISMISSED.
KILUSAN-OLALIA, then a newly-formed labor organization, challenged the incumbency of
UKCEO-PTGWO, by filing a petition for certification election with the Ministry (now SO ORDERED.
Department) of Labor and Employment (MOLE), Regional Office No. IV, Quezon City. xxxx

A certification election was subsequently conducted on July 1, 1986 with UKCEO-PTGWO On the Decision of the Court dated May 9, 1990, KILUSAN-OLALIA and 76 individual
winning by a margin of 20 votes over KILUSAN-OLALIA. Remaining as uncounted were complainants filed a motion for execution with the DOLE (formerly MOLE). In an Order

29
issued on June 29, 2000, the DOLE considered as physically impossible, and moot and discretion. The questioned orders dated June 29, 2000 and December 6, 2000 of the
academic the opening and counting of the 64 challenged ballots because they could no Secretary of Labor are AFFIRMED. Costs against petitioners.
longer be located despite diligent efforts, and KILUSAN-OLALIA no longer actively
participated when the company went through another CBA cycle. However, the DOLE SO ORDERED.
ordered the payment of the differential wages and other benefits of the regularized
workers, to wit: With the denial of its motion for reconsideration, Kimberly elevated the case before this
Court, on the following grounds:
ACCORDINGLY, let a partial writ of execution issue to enforce payment of the sum of (sic)
P576,510.57 to the 22 individual workers listed in ANNEX A of Kimberly’s The Court of Appeals committed serious error in affirming the ruling of the
Comment/Reply dated 31 October 1991 representing their differential pay with respect Secretary of Labor that even casual employees who had not rendered one year
to the minimum wage, cost of living allowance, 13th month pay and benefits provided of service were considered regular employees, thereby nullifying and
under the applicable collective bargaining agreement from the time they became regular disregarding the Honorable Court’s Decision dated May 9, 1990 that only
employees as above-indicated. casual employees who had rendered at least one (1) year of service were
considered regular employees.
Further, the Bureau of Working Conditions is hereby directed to submit, within twenty
(20) days from receipt of this Order, a list of workers who have been regularized and the The Court of Appeals also gravely erred in upholding the ruling of Labor
corresponding benefits owing to them from the time they became regular employees. Secretary that persons not party to the petition in G.R. No. 77629 were entitled
to regularization differentials, thereby amending the Honorable Court’s
SO ORDERED. decision.[4]

Pursuant thereto, on August 1, 2000, the Bureau of Working Conditions (BWC) submitted Kimberly, in this case, contends that the reckoning point in determining who among its
its report finding 47 out of the 76 complainants as entitled to be regularized. casual employees are entitled to regularization should be April 21, 1986, the date
Kimberly filed a motion for reconsideration of the DOLE Order as well as the BWC Report, KILUSAN-OLALIA filed a petition for certification election to challenge the incumbency of
arguing in the main that the decision in G.R. Nos. 77629 and 78791 only pertained to UKCEO-PTGWO. It posits that in the implementation of the May 9, 1990 Decision in G.R.
casuals who had rendered one year of service as of April 21, 1986, the filing date of No. 77629,[5] the DOLE should then exclude the employees who had not rendered at least
KILUSAN-OLALIA’s petition for certification election. On December 6, 2000, however, the one (1) year of service from the said date.[6]
DOLE denied the motion, disposing of it as follows:
Kimberly also argues that the employees who are not parties in G.R. No. 77629 should not
WHEREFORE, the motion for reconsideration filed by the COMPANY is hereby DENIED be included in the implementation orders. For DOLE to declare this group of employees
for lack of merit. No further motion of the same nature shall be entertained. Further, the as regular and to order the payment of differential pay to them is to amend a final and
Report of computation submitted by the Bureau of Working Conditions is hereby executory decision of this Court.[7]
APPROVED and made an integral part of this Order.
We do not agree. In G.R. No. 77629, we ruled as follows:
Let a writ of execution be issued immediately. The law [thus] provides for two kinds of regular employees, namely: (1) those who are
engaged to perform activities which are usually necessary or desirable in the usual
SO ORDERED. business or trade of the employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the activity in which they are
Kimberly, steadfast in its stand, filed a petition for certiorari before the appellate court, employed. The individual petitioners herein who have been adjudged to be regular
which was docketed as CA-G.R. SP No. 62257 alleging that the employees who were employees fall under the second category. These are the mechanics, electricians,
dismissed due to the illegal strike staged on May 17, 1987 (the subject of G.R. Nos. machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters
149158-59) should not be awarded regularization differentials. and masons. It is not disputed that these workers have been in the employ of KIMBERLY
On June 27, 2002, the CA dismissed Kimberly’s petition, and disposed of the case as for more than one year at the time of the filing of the petition for certification election by
follows: KILUSAN-OLALIA.

WHEREFORE, the instant petition is DISMISSED for failure to show grave abuse of Owing to their length of service with the company, these workers became regular

30
employees, by operation of law, one year after they were employed by KIMBERLY or criterion for that of the labor tribunal in determining wherein lies the weight of
through RANK. While the actual regularization of these employees entails the mechanical evidence or what evidence is entitled to belief.[16]
act of issuing regular appointment papers and compliance with such other operating
procedures as may be adopted by the employer, it is more in keeping with the intent and WHEREFORE, premises considered, the petition for review on certiorari is DENIED DUE
spirit of the law to rule that the status of regular employment attaches to the casual COURSE.
worker on the day immediately after the end of his first year of service. To rule otherwise,
and to instead make their regularization dependent on the happening of some SO ORDERED.
contingency or the fulfillment of certain requirements, is to impose a burden on the Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.
employee which is not sanctioned by law.

That the first stated position is the situation contemplated and sanctioned by law is
further enhanced by the absence of a statutory limitation before regular status can be
acquired by a casual employee. The law is explicit. As long as the employee has rendered
at least one year of service, he becomes a regular employee with respect to the activity in
which he is employed. The law does not provide the qualification that the employee must
first be issued a regular appointment or must first be formally declared as such before he
can acquire a regular status. Obviously, where the law does not distinguish, no distinction
should be drawn.[8]
Considering that an employee becomes regular with respect to the activity in which he is
employed one year after he is employed, the reckoning date for determining his
regularization is his hiring date. Therefore, it is error for petitioner Kimberly to claim that
it is from April 21, 1986 that the one-year period should be counted. While it is a fact that
the issue of regularization came about only when KILUSAN-OLALIA filed a petition for
certification election, the concerned employees attained regular status by operation of
law.[9]

Further, the grant of the benefit of regularization should not be limited to the employees
who questioned their status before the labor tribunal/court and asserted their rights; it
should also extend to those similarly situated. [10] There is, thus, no merit in petitioner's
contention that only those who presented their circumstances of employment to the
courts are entitled to regularization.[11]

As to Kimberly’s assertions that some of the employees were already recalled, reassigned
or replaced by the RANK Manpower Services, and that some did not return to work, the
Court notes that these are questions of fact. Basic is the rule that, in petitions for review
on certiorari under Rule 45 of the Rules of Court, only questions of law may be raised, [12]
except, if the factual findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings
culled by the court of origin,[13] which is not so in the instant case. The DOLE and the
appellate court herein are uniform in their findings.
Finally, oft-repeated is the rule that appellate courts accord the factual findings of the
labor tribunal not only respect but also finality when supported by substantial evidence,
[14]
unless there is showing that the labor tribunal arbitrarily disregarded evidence before
it or misapprehended evidence of such nature as to compel a contrary conclusion if
properly appreciated.[15] Likewise, the appellate court cannot substitute its own judgment

31
 G.R. NO. 151827, April 29, 2005
JOSEFINA BENARES, PETITIONER, VS. JAIME PANCHO, RODOLFO PANCHO, JR., On October 15, 1991, complainants alleged to have been terminated    without being paid
JOSELITO MEDALLA, PAQUITO MAGALLANES, ALICIA MAGALLANES, EVELYN termination benefits by respondent in retaliation to what they have done in reporting to
MAGALLANES, VIOLETA VILLACAMPA, MARITESS PANCHO, ROGELIO PANCHO AND the Department of Labor and Employment their working conditions viz-a-viz (sic) wages
ARNOLFO PANCHO, RESPONDENTS. and other mandatory benefits.

DECISION On July 14, 1992, notification and summons were served to the parties wherein
TINGA, J.: complainants were directed to file a formal complaint.

Assailed in this Petition for Review on Certiorari[1] is the Decision[2] of the Court of Appeals On July 28, 1992, a formal complaint was filed for illegal dismissal with money claims.
which affirmed the National Labor Relations Commission’s (NLRC) decision [3] holding
that respondents were illegally dismissed and ordering petitioner to pay respondents From the records, summons and notices of hearing were served to the parties and
separation pay, backwages, 13th month pay, Cost of Living Allowance (COLA), emergency apparently no amicable settlement was arrived, hence, the parties were directed to file
relief allowance (ERA), salary differentials and attorney’s fees.  The NLRC reversed the their respective position papers.
Labor Arbiter’s finding that respondents failed to lay down the facts and circumstances
surrounding their dismissal and to prove their entitlement to monetary awards. [4] On January 22, 1993, complainant submitted their position paper, while respondent filed
its position paper on June 21, 1993.
The antecedents, as narrated by the NLRC,  follow.
Complainants alleged to have started working as sugar farm workers on various dates, to On March 17, 1994, complainants filed their reply position paper and affidavit.
wit:                                                                                                                                    Correspondingly, a rejoinder was filed by respondent on May 16, 1994.
1. Jaime Pancho November 15, 1964
2. Rodolfo Pancho, Jr. February 1, 1975 On August 17, 1994, from the Minutes of the scheduled hearing, respondent failed to
3. Joselito Medalla November 15, 1964 appear, and that the Office will evaluate the records of the case whether to conduct a
4. Paquito Magallanes March 10, 1973 formal trial on the merits or not, and that the corresponding order will be issued.
5. Felomino Magallanes November 15, 1964
6. Alicia Magallanes January 15, 1964 On January 16, 1996, the Labor Arbiter issued an order to the effect that the case is now
7. Evelyn Magallanes January 1, 1974 deemed submitted for resolution.
8. Violeta Villacampa December 1, 1979
9. Maritess Pancho December 15, 1985 On April 30, 1998, the Labor Arbiter a quo issued the assailed decision dismissing the
10. Rogelio Pancho December 1, 1979 complaint for lack of merit.
11. Arnolfo Pancho February 1, 1975
On June 26, 1998, complainants not satisfied with the aforecited ruling interposed the
Respondent Hda. Maasin II is a sugar cane plantation located in Murcia, Negros instant appeal anchored on the ground that:
Occidental with an area of 12-24 has. planted, owned and managed by Josefina Benares,
individual co-respondent. THE HONORABLE LABOR ARBITER GRAVELY ABUSED ITS DISCRETION AND SERIOUSLY
ERRED IN HOLDING THAT THE COMPLAINANTS FAILED TO DISCUSS THE FACTS AND
On July 24, 1991, complainants thru counsel wrote the Regional Director of the CIRCUMSTANCES SURROUNDING THEIR DISMISSAL, HENCE, THERE IS NO DISMISSAL
Department of Labor and Employment, Bacolod City for intercession particularly in the TO    SPEAK OF AND THAT COMPLAINANTS FAILED TO ALLEGE AND PROVE THAT
matter of wages and other benefits mandated by law. THEIR CLAIMS ARE VALID, HENCE THE DISMISSAL OF THEIR COMPLAINT WOULD
CAUSE GRAVE AND IRREPARABLE DAMAGE TO HEREIN COMPLAINANTS. [5]
On September 24, 1991, a routine inspection was conducted by personnel of the Bacolod
District Office of the Department of Labor and Employment. Accordingly, a report and The NLRC held that respondents attained the status of regular seasonal workers of Hda.
recommendation was made, hence, the endorsement by the Regional Director of the Maasin II having worked therein from 1964-1985.  It found that petitioner failed to
instant case to the Regional Arbitration Branch, NLRC, Bacolod City for proper hearing discharge the burden of proving that the termination of respondents was for a just or
and disposition. authorized cause. Hence, respondents were illegally dismissed and should be awarded

32
their money claims. part, respondents filed a Memoranda For Private Respondents[13] dated May 7, 2003
alleging that the Court of Appeals correctly relied upon the factual findings of the NLRC
Petitioner’s motion for reconsideration [6] dated May 12, 1999 was denied in the after having found the same to be supported by substantial evidence. They insist that
resolution[7] dated October 29, 1999. they are regular seasonal employees of the sugar plantation. As such, petitioner has the
burden of proving that their dismissal was for a just or authorized cause.
The Court of Appeals affirmed the NLRC’s ruling, with the modification that the
backwages and other monetary benefits shall be computed from the time compensation As regards the contention that the NLRC erroneously awarded COLA and ERA,
was withheld in accordance with Article 279 of the Labor Code, as amended by Republic respondents cite Osias Academy v. DOLE,[14] which provides that the NLRC can extend
Act No. 6715. monetary awards even if these are not prayed for if the monetary benefits are statutory
grants intended to alleviate the laborer’s plight like the COLA and ERA.
In its Resolution[8] dated November 28, 2001, the appellate court denied petitioner’s
motion for reconsideration for lack of merit. The main question raised by the present petition is whether respondents are regular
employees of Hacienda Maasin and thus entitled to their monetary claims.  Related to this
Petitioner is now before this Court averring that the Court of Appeals erred in affirming is the issue of whether respondents were illegally terminated.
the decision of the NLRC.  While petitioner concedes that the factual findings of the NLRC
are generally binding on the appellate court, petitioner insists that the findings of the This case presents a good opportunity to reiterate the Court’s rulings on the subject of
NLRC are vague and contradictory, thereby necessitating review. seasonal employment.  The Labor Code defines regular and casual employment, viz:

According to petitioner, the fact that she was able to present sufficient proof to rebut the Art. 280. REGULAR AND CASUAL EMPLOYMENT.—The provisions of written agreement to
claim of illegal dismissal should be considered in light of the NLRC’s admission that there the contrary notwithstanding and regardless of the oral agreement of the parties, an
are gray areas in the case which require clarification.  Petitioner avers that the NLRC employment shall be deemed to be regular where the employee has been engaged to
should have at least remanded the case to the labor arbiter to thresh out these gray perform activities which are usually necessary or desirable in the usual business or trade
areas.  She further claims that the NLRC was overly zealous in awarding COLA and ERA of the employer, except where the employment has been fixed for a specific project or
despite the fact that respondents did not even pray for these awards in their complaint.  undertaking the completion or termination of which has been determined at the time of
She also questions the NLRC’s general statement to the effect that the payroll she the engagement of the employee or where the work or service to be performed is
submitted is not convincing asserting that she submitted 235 sets of payroll, not just one, seasonal in nature and the employment is for the duration of the season.
and that the NLRC did not even bother to explain why it found the payroll unconvincing.
An employment shall be deemed to be casual if it is not covered by the preceding
Respondents filed a Comment[9] dated May 10, 2002 alleging that petitioner failed to paragraph: Provided, That, any employee who has rendered at least one year of service,
submit certified true copies of the assailed decisions and resolutions, and that the whether such service is continuous or broken, shall be considered a regular employee
petition lacks proof of service and raises questions of fact. with respect to the activity in which he is employed and his employment shall continue
while such activity exists.
In her Reply to Comment[10] dated September 17, 2002, petitioner points out that the Rules
of Court do not require that all copies of the petition contain certified true copies of the The law provides for three kinds of employees: (1) regular employees or those who have
questioned decisions and resolutions. Further, all copies of the petition filed with the been engaged to perform activities which are usually necessary or desirable in the usual
Court contain an affidavit of service.  Respondents’ copy does not have an affidavit of business or trade of the employer; (2) project employees or those whose employment has
service because the sworn declaration can not be executed before service of the petition been fixed for a specific project or undertaking, the completion or termination of which
is actually made.  Petitioner also maintains that the rule on review of findings of fact by has been determined at the time of the engagement of the employee or where the work or
the Supreme Court admits of certain exceptions such as when the conclusions arrived at service to be performed is seasonal in nature and the employment is for the duration of
are grounded entirely on speculation, surmises and conjectures as in this case. the season; and (3) casual employees or those who are neither regular nor project
employees.[15]
The petition was given due course and the parties were required to submit their
respective memoranda in the Resolution[11] dated March 3, 2003.  Petitioner filed a In Mercado v. NLRC,[16] the Court ruled that seasonal workers do not become regular
Manifestation and Compliance[12] dated April 22, 2003 adopting the allegations in her employees by the mere fact that they have rendered at least one year of service, whether
Petition for Review on Certiorari and Reply to Comment as her memorandum.  For their continuous or broken, because the proviso in the second paragraph of Article 280

33
demarcates as “casual” employees, all other employees who do not fall under the
definition of the preceding paragraph. It deems as regular employees those “casual” The NLRC was more unequivocal when it pronounced that respondents have acquired the
employees who have rendered at least one year of service regardless of the fact that such status of regular seasonal employees having worked for more than one year, whether
service may be continuous or broken. continuous or broken in petitioner’s hacienda.

The factual circumstances obtaining in the Mercado case, however, are peculiar.  In that According to petitioner, however, the NLRC’s conclusion is highly suspect considering its
case, the workers were engaged to do a particular phase of agricultural work necessary own admission that there are “gray areas which requires (sic) clarification.”  She alleges
for rice and/or sugarcane production, after which they would be free to render services that despite these gray areas, the NLRC “chose not to remand the case to the Labor
to other farm workers who need their services. Arbiter….as this would unduly prolong the agony of the complainants in particular.” [21]

In contrast, in the case of Hacienda Fatima v. National Federation of Sugarcane Workers- Petitioner perhaps wittingly omitted mention that the NLRC “opted to appreciate the
Food and General Trade,[17] respondents performed the same tasks for petitioners every merits of the instant case based on available documents/pleadings.” [22] That the NLRC
season for several years. Thus, they were considered the latter’s regular employees for chose not to remand the case to the labor arbiter for clarificatory proceedings and
their respective tasks.  The fact that they do not work continuously for one whole year instead decided the case on the basis of the evidence then available to it is a judgment call
but only for the duration of the season does not detract from considering them in regular this Court shall not interfere with in the absence of any showing that the NLRC abused its
employment since in a litany of cases this Court has already settled that seasonal workers discretion in so doing.
who are called to work from time to time and are temporarily laid off during off-season
are not separated from service in that period, but merely considered on leave until re- The Court of Appeals, in fact, found no such grave abuse of discretion on the part of the
employed.[18] NLRC.  Accordingly, it dismissed the petition for certiorari and affirmed with modification
the findings of the NLRC.  It is well to note at this point that in quasi-judicial proceedings,
Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the primary the quantum of evidence required to support the findings of the NLRC is only substantial
standard for determining regular employment is the reasonable connection between the evidence or that amount of relevant evidence which a reasonable mind might accept as
particular activity performed by the employee vis-à -vis the usual trade or business of the adequate to justify a conclusion.[23]
employer. This connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its The issue, therefore, of whether respondents were regular employees of petitioner has
entirety. If the employee has been performing the job for at least a year, even if the been adequately dealt with.  The labor arbiter, the NLRC and the Court of Appeals have
performance is not continuous and merely intermittent, the law deems repeated and similarly held that respondents were regular employees of petitioner.  Since it is a settled
continuing need for its performance as sufficient evidence of the necessity if not rule that the factual findings of quasi-judicial agencies which have acquired expertise in
indispensability of that activity to the business. Hence, the employment is considered the matters entrusted to their jurisdiction are accorded by this Court not only respect but
regular, but only with respect to such activity and while such activity exists. [19] even finality,[24] we shall no longer disturb this finding.

In this case, petitioner argues that respondents were not her regular employees as they Petitioner next underscores the NLRC decision’s mention of the “payroll” she presented
were merely “pakiao” workers who did not work continuously in the sugar plantation.  despite the fact that she allegedly presented 235 sets of payroll, not just one payroll.  This
They performed such tasks as weeding, cutting and loading canes, planting cane points, circumstance does not in itself evince any grave abuse of discretion on the part of the
fertilizing, cleaning the drainage, etc. These functions allegedly do not require NLRC as it could well have been just an innocuous typographical error.
respondents’ daily presence in the sugarcane field as it is not everyday that one weeds,
cuts canes or applies fertilizer.  In support of her allegations, petitioner submitted Verily, the NLRC’s decision, affirmed as it was by the Court of Appeals, appears to have
“cultivo” and milling payrolls. been arrived at after due consideration of the evidence presented by both parties.

The probative value of petitioner’s evidence, however, has been passed upon by the labor We also find no reason to disturb the finding that respondents were illegally terminated. 
arbiter, the NLRC and the Court of Appeals.  Although the labor arbiter dismissed When there is no showing of clear, valid and legal cause for the termination of
respondents’ complaint because their “position paper is completely devoid of any employment, the law considers the matter a   case of illegal dismissal and the burden is
discussion about their alleged dismissal, much less of the probative facts thereof,” [20] the on the employer to prove that the termination was for a just or authorized cause. [25] In
ground for the dismissal of the complaint implies a finding that respondents are regular this case, as found both by the NLRC and the Court of Appeals, petitioner failed to prove
employees. any such cause for the dismissal of respondents.

34
WHEREFORE, the instant petition is DENIED.  The assailed Decision and Resolution of
the Court of Appeals respectively dated June 29, 2001 and November 28, 2001 are hereby
AFFIRMED.  Costs against petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

35
 SECOND DIVISION to get out of employment on their own volition.
G.R. NO. 150478, April 15, 2005
HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L. STARKE, PETITIONERS, Wherefore, beginning today, July 18, only those who did not sign for CARP will be given
VS. CANDIDO CUENCA, FRANCISCO ACULIT, ANGELINA ALMONIA, DONALD employment by Hda. Bino.
ALPUERTO, NIDA BANGALISAN, ROGELIO CHAVEZ, ELMO DULINGGIS, MERCEDES
EMPERADO, TORIBIO EMPERADO, JULIANA ENCARNADO, REYNALDO ENCARNADO, (Sgd.) Hortencia Starke[3]
GENE FERNANDO, JOVEN FERNANDO, HERNANI FERNANDO, TERESITA FERNANDO,
BONIFACIO GADON, JOSE GALLADA, RAMONITO KILAYKO, ROLANDO KILAYKO, The respondents regarded such notice as a termination of their employment. As a
ALFREDO LASTIMOSO, ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO, LAURENCIA consequence, they filed a complaint for illegal dismissal, wage differentials, 13 th month
LOMBO, LUCIA LOMBO, JOEL MALACAPAY, ADELA MOJELLO, ERNESTO MOJELLO, pay, holiday pay and premium pay for holiday, service incentive leave pay, and moral and
FRUCTOSO MOJELLO, JESSICA MOJELLO, JOSE MOJELLO, MARITESS MOJELLO, exemplary damages with the NLRC, Regional Arbitration Branch No. VI, Bacolod City, on
MERLITA MOJELLO, ROMEO MOJELLO, RONALDO MOJELLO, VALERIANA MOJELLO, September 17, 1996.[4]
JAIME NEMENZO, RODOLFO NAPABLE, SEGUNDIA OCDEN, JARDIOLINA PABALINAS,
LAURO PABALINAS, NOLI PABALINAS, RUBEN PABALINAS, ZALDY PABALINAS, In their Joint Sworn Statement, the respondents as complainants alleged inter alia that
ALFREDO PANOLINO, JOAQUIN PEDUHAN, JOHN PEDUHAN, REYNALDO PEDUHAN, they are regular and permanent workers of the hacienda and that they were dismissed
ROGELIO PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS, JR., LORNA PORRAS, without just and lawful cause. They further alleged that they were dismissed because
JIMMY REYES, ALICIA ROBERTO, MARCOS ROBERTO, JR., MARIA SANGGA, RODRIGO they applied as beneficiaries under the Comprehensive Agrarian Reform Program (CARP)
SANGGA, ARGENE SERON, SAMUEL SERON, SR., ANGELINO SENELONG, ARMANDO over the land owned by petitioner Starke.[5]
SENELONG, DIOLITO SENELONG, REYNALDO SENELONG, VICENTE SENELONG,
FEDERICO STA. ANA, ROGELIO SUASIM, EDNA TADLAS, ARTURO TITONG, JR., JOSE For her part, petitioner Starke recounted that the company’s Board of Directors
TITONG, JR., NANCY VINGNO, ALMA YANSON, JIMMY YANSON, MYRNA VILLANUEVA petitioned the Sangguniang Bayan of Kabankalan for authority to re-classify, from
BELENARIO, SALVADOR MALACAPAY, AND RAMELO TIONGCO, RESPONDENTS. agricultural to industrial, commercial and residential, the whole of Hacienda Bino, except
the portion earmarked for the CARP. She asserted that half of the workers supported the
DECISION re-classification but the others, which included the herein respondents, opted to become
CALLEJO, SR., J.: beneficiaries of the land under the CARP.  Petitioner Starke alleged that in July 1996,
there was little work in the plantation as it was off-season; and so, on account of the
Before us is a petition for review of the Decision [1] of the Court of Appeals (CA), dated July seasonal nature of the work, she issued the order giving preference to those who
31, 2001, and the Resolution dated September 24, 2001 denying the petitioners’ motion supported the re-classification. She pointed out that when the milling season began in
for reconsideration. The assailed decision modified the decision of the National Labor October 1996, the work was plentiful again and she issued notices to all workers,
Relations Commission (NLRC) in NLRC Case No. V-000099-98. including the respondents, informing them of the availability of work. However, the
respondents refused to report back to work. With respect to the respondents’ money
Hacienda Bino is a 236-hectare sugar plantation located at Barangay Orong, Kabankalan claims, petitioner Starke submitted payrolls evidencing payment thereof.
City, Negros Occidental, and represented in this case by Hortencia L. Starke, owner and
operator of the said hacienda. On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a Decision, [6] finding that
petitioner Starke’s notice dated July 18, 1996 was tantamount to a termination of the
The 76 individual respondents were part of the workforce of Hacienda Bino consisting of respondents’ services, and holding that the petitioner company was guilty of illegal
220 workers, performing various works, such as cultivation, planting of cane points, dismissal. The dispositive portion of the decision reads:
fertilization, watering, weeding, harvesting, and loading of harvested sugarcanes to cargo
trucks.[2] WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal
of the complainants illegal and ordering respondent Hortencia L. Starke, Inc. represented
On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or by Hortencia L. Starke, as President, to:
Notice which stated, thus:
To all Hacienda Employees: Reinstate the complainants to their former position without loss of seniority
rights immediately upon receipt of this decision;
Please bear in mind that all those who signed in favor of CARP are expressing their desire

36
 PAY the backwages and wage differentials of the complainants, to wit: WHEREFORE, the decision of the National Labor Relations Commission is hereby
MODIFIED by deleting the award for holiday pay and premium pay for holidays. The rest
in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred of the Decision is hereby AFFIRMED.
Fifty-Two and 72/100 (P495,852.72) Pesos; and
SO ORDERED.[12]
TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand
Five Hundred Eighty-Five and 27/100 (P49,585.27) Pesos. The CA ruled that the concept of stare decisis is not relevant to the present case. It held
that the ruling in Mercado, Sr. v. NLRC[13] does not operate to abandon the settled doctrine
Respondents are further directed to deposit to this Office the total judgment award of that sugar workers are considered regular and permanent farm workers of a sugar
FIVE HUNDRED FORTY-FIVE THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND plantation owner, considering that there are facts peculiar in that case which are not
99/100 (P545,437.99) PESOS within ten (10) days from receipt of this decision. present in the case at bar. In the Mercado case, the farm laborers worked only for a
definite period for a farm owner since the area of the land was comparatively small, after
All other claims are hereby DISMISSED for lack of merit. which they offer their services to other farm owners. In this case, the area of the hacienda,
which is 236 hectares, simply does not allow for the respondents to work for a definite
SO ORDERED.[7] period only.

Both the petitioners and the respondents appealed the case to the NLRC.  On July 24, The CA also held that the petitioners’ reliance on Bacolod-Murcia Milling Co. Inc. v.
1998, the NLRC affirmed with modification the decision of the Labor Arbiter. The NLRC[14] was misplaced, as it in fact, bolstered the respondents' posture that they are
dispositive part of its decision reads: regular employees. In that case, the Court held that a sugar worker may be considered as
WHEREFORE, premises considered, the Decision of the Labor Arbiter is AFFIRMED in regular employment even during those years when he is merely a seasonal worker
WITH MODIFICATIONS. Respondent is further ordered to pay the complainants listed in where the issues concern the determination of an employer-employee relationship and
the Holiday Pay Payroll the amounts due them. security of tenure.

SO ORDERED.[8] Further, the CA held that the respondents’ appeal to the NLRC was not perfected since
they failed to accompany their notice of appeal with a memorandum of appeal, or to
A motion for reconsideration of the said decision was denied by the NLRC. [9] Dissatisfied, timely file a memorandum of appeal. Thus, as to them, the decision of the Labor Arbiter
the respondents appealed the case to the CA where the following issues were raised: became final and executory. The NLRC, therefore, gravely abused its discretion when it
modified the decision of the Labor Arbiter and awarded to the respondents holiday pay
THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND and premium for holiday pay. Finally, the CA affirmed the award of backwages, finding no
POWER BY VIOLATING THE DOCTRINE OF “STARE DECISIS” LAID DOWN BY circumstance that would warrant a reversal of the findings of the Labor Arbiter and NLRC
THE SUPREME COURT AND THE APPLICABLE LAWS AS TO THE STATUS OF on this point. [15]
THE SUGAR WORKERS.
On September 24, 2001, the CA denied the motion for reconsideration filed by the
THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY petitioners due to their failure to indicate the date of the receipt of the decision to
ADMITTING THE MOTION TO DISMISS AND/OR ANSWER TO PETITIONERS’ determine the timeliness of the motion.[16]
APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY COUNSEL FOR
THE HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY Hence, this petition for review.
BEYOND THE REGLEMENTARY PERIOD.
The petitioners submit the following issues:
THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING
CREDENCE TO THE SWEEPING ALLEGATIONS OF THE COMPLAINANTS AS TO
THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT ANY BASIS. [10] WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ABUSED
ITS DISCRETION AND POWER BY VIOLATING THE DOCTRINE OF "STARE
On July 31, 2001, the CA rendered a Decision, [11] the dispositive portion of which reads: DECISIS" LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS
AS TO THE STATUS OF THE SUGAR WORKERS.

37
 jurisdictional and, if not complied with, the court must deny the motion outright. [21]
WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN DISMISSING THE MOTION FOR RECONSIDERATION FOR FAILURE TO The petition is without merit.
STATE THE DATE OF THE RECEIPT OF THE DECISION IN THE MOTION FOR
RECONSIDERATION.[17] On the substantial issue of whether the respondents are regular or seasonal employees,
the petitioners contend that the CA violated the doctrine of stare decisis by not applying
Petitioner Starke contends that the established doctrine that seasonal employees are the ruling in the Mercado case that sugar workers are seasonal employees.  We hold
regular employees had been overturned and abandoned by Mercado, Sr. v. NLRC.[18] She otherwise. Under the doctrine of stare decisis, when a court has laid down a principle of
stresses that in that case, the Court held that petitioners therein who were sugar workers, law as applicable to a certain state of facts, it will adhere to that principle and apply it to
are seasonal employees and their employment legally ends upon completion of the all future cases in which the facts are substantially the same.[22] Where the facts are
project or the season.  Petitioner Starke argues that the CA violated the doctrine of stare essentially different, however, stare decisis does not apply, for a perfectly sound principle
decisis in not applying the said ruling.  She asserts that the respondents, who are also as applied to one set of facts might be entirely inappropriate when a factual variance is
sugar workers, are seasonal employees; hence, their employment can be terminated at introduced.[23]
the end of the season and such termination cannot be considered an illegal dismissal.  The CA correctly found that the facts involved in this case are different from the Mercado
Petitioner Starke maintains that the determination of whether the workers are regular or case; therefore, the ruling in that case cannot be applied to the case at bar, thus:
seasonal employees is not dependent on the number of hectares operated upon by them, We do not find the concept of stare decisis relevant in the case at bench. For although in
or the number of workers, or the capitalization involved, but rather, in the nature of the the Mercado case, the Supreme Court held the petitioners who were sugar workers not to
work. She asserts that the respondents also made their services available to the be regular but seasonal workers, nevertheless, the same does not operate to abandon the
neighboring haciendas.  To buttress her contention that the respondents are seasonal settled doctrine of the High Court that sugar workers are considered regular and
employees, petitioner Starke cites Rep. Act 6982, An Act Strengthening the Social permanent farm workers of a sugar plantation owner, the reason being that there are
Amelioration Program in the Sugar Industry, Providing the Mechanics for its facts present that are peculiar to the Mercado case. The disparity in facts between the
Implementation, and for other Purposes, which recognizes the seasonal nature of the Mercado case and the instant case is best exemplified by the fact that the former decision
work in the sugar industry.[19] ruled on the status of employment of farm laborers, who, as found by the labor arbiter,
work only for a definite period for a farm worker, after which they offer their services to
Petitioner Starke also takes exception to the denial of her motion for reconsideration due other farm owners, considering the area in question being comparatively small,
to failure to state the date of the receipt of the decision. She asserts that a denial of a comprising of seventeen and a half (17½) hectares of land, such that the planting of rice
motion for reconsideration due to such cause is merely directory and not mandatory on and sugar cane thereon could not possibly entail a whole year operation. The herein case
the part of the CA.  Considering that the amount involved in this case and the fact that the presents a different factual condition as the enormity of the size of the sugar hacienda of
motion was filed within the reglementary period, the CA should have considered the petitioner, with an area of two hundred thirty-six (236) hectares, simply do not allow for
motion for reconsideration despite such procedural lapse.[20] private respondents to render work only for a definite period.
Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the
On the other hand, the respondents aver that the petitioners erroneously invoke the Mercado case. 
doctrine of stare decisis since the factual backdrop of this case and the Mercado case is not
similar.  The respondents posit that the Mercado case ruled on the status of employment In Abasolo v. NLRC,[24] and earlier, in Philippine Tobacco Flue-Curing & Redrying
of farm laborers who work only for a definite period of time for a farm owner, after which Corporation v. NLRC,[25] the Court made the following observations:
they offer their services to other farm owners.  Contrarily, the respondents contend that
they do not work for a definite period but throughout the whole year, and do not make … In Mercado, although respondent constantly availed herself of the petitioners’ services
their services available to other farm owners.  Moreover, the land involved in the from year to year, it was clear from the facts therein that they were not in her regular
Mercado case is comparatively smaller than the sugar land involved in this case. The employ. Petitioners therein performed different phases of agricultural work in a given
respondents insist that the vastness of the land involved in this case requires the workers year.  However, during that period, they were free to work for other farm owners, and in
to work on a year-round basis, and not on an “on-and-off” basis like the farm workers in fact they did. In other words, they worked for respondent, but were nevertheless free to
the Mercado case. contract their services with other farm owners. The Court was thus emphatic when it
ruled that petitioners were mere project employees, who could be hired by other farm
Finally, the respondents maintain that the requirement that the date of receipt of the owners….[26]
decision should be indicated in the motion for reconsideration is mandatory and

38
Recently, the Court reiterated the same observations in Hacienda Fatima v. National
Federation of Sugarcane Workers-Food and General Trade [27] and added that the
petitioners in the Mercado case were “not hired regularly and repeatedly for the same
phase/s of agricultural work, but on and off for any single phase thereof.”

In this case, there is no evidence on record that the same particulars are present. The
petitioners did not present any evidence that the respondents were required to perform
certain phases of agricultural work for a definite period of time. Although the petitioners
assert that the respondents made their services available to the neighboring haciendas,
the records do not, however, support such assertion.
The primary standard for determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade
or business of the employer.[28] There is no doubt that the respondents were performing
work necessary and desirable in the usual trade or business of an employer. Hence, they
can properly be classified as regular employees.

For respondents to be excluded from those classified as regular employees, it is not

enough that they perform work or services that are seasonal in nature.  They must have
been employed only for the duration of one season.[29] While the records sufficiently show
that the respondents’ work in the hacienda was seasonal in nature, there was, however,
no proof that they were hired for the duration of one season only. In fact, the payrolls, [30]
submitted in evidence by the petitioners, show that they availed the services of the
respondents since 1991.  Absent any proof to the contrary, the general rule of regular
employment should, therefore, stand. It bears stressing that the employer has the burden
of proving the lawfulness of his employee’s dismissal. [31]

On the procedural issue, petitioner Starke avers that the CA should not have denied
outright her motion for reconsideration, considering its timely filing and the huge amount
involved. This contention is already moot. Petitioner Starke has already aired in this
petition the arguments in her motion for reconsideration of the CA decision, which have
been adequately addressed by this Court. Assuming arguendo that the CA indeed failed to
consider the motion for reconsideration, petitioner Starke was not left without any other
recourse.[32]

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.  The Decision of the Court of
Appeals, dated July 31, 2001, and its Resolution dated September 24, 2001 are hereby
AFFIRMED.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

39
 FIRST DIVISION for the Provincial Government of Nueva Vizcaya from 1993 to 1996.  Nevertheless, the
G.R. NO. 157788, March 08, 2005 NLRC denied petitioner’s Motion for Reconsideration.  Aggrieved, petitioner elevated the
SAINT MARY’S UNIVERSITY, REPRESENTED BY ITS PRESIDENT REV. JESSIE M. matter to the Court of Appeals, which affirmed the Decision of the NLRC.
HECHANOVA, CICM, PETITIONER, VS. COURT OF APPEALS (FORMER SPECIAL
TWELFTH DIVISION), NATIONAL LABOR RELATIONS COMMISSION (SECOND Hence, this petition with a motion for temporary restraining order, alleging that the Court
DIVISION) AND MARCELO A. DONELO, RESPONDENTS. of Appeals erred in:

DECISION …FINDING THAT THE RESPONDENT DONELO ATTAINED A PERMANENT STATUS, THE
QUISUMBING, J.: SAID FINDING BEING CLEARLY CONTRARY TO THE EVIDENCE AT HAND AND DEVOID
OF BASIS IN LAW.
For review on certiorari are the Decision[1] dated May 21, 2002 and the Resolution[2]
dated February 12, 2003 of the Court of Appeals in CA-G.R. SP No. 63240 which dismissed …HOLDING THAT THE TWIN-NOTICE REQUIREMENT IMPOSED BY LAW BEFORE
the petition for certiorari of St. Mary’s University and its motion for reconsideration, TERMINATION OF EMPLOYMENT CAN BE LEGALLY EFFECTED MUST BE COMPLIED
respectively. WITH BY THE PETITIONER.

Respondent Marcelo Donelo started teaching on a contractual basis at St. Mary’s …AFFIRMING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IN
University in 1992.  In 1995, he was issued an appointment as an Assistant Professor I.  ORDERING THE PETITIONER TO REINSTATE RESPONDENT DONELO TO HIS FORMER
Later on, he was promoted to Assistant Professor III.  He taught until the first semester of POSITION WITHOUT LOSS OF SENIORITY RIGHTS AND PRIVILEGES WITH FULL
school year 1999-2000 when the school discontinued giving him teaching assignments.  BACKWAGES FROM THE TIME OF HIS DISMISSAL UNTIL ACTUALLY REINSTATED. [5]
For this, respondent filed a complaint for illegal dismissal against the university.
Plainly, the ultimate questions before us are:
In its defense, petitioner St. Mary’s University showed that respondent was merely a part-
time instructor and, except for three semesters, carried a load of less than eighteen units.  Was respondent a full-time teacher?
Petitioner argued that respondent never attained permanent or regular status for he was
not a full-time teacher.  Further, petitioner showed that respondent was under Had he attained permanent status?
investigation by the university for giving grades to students who did not attend classes. 
Petitioner alleged that respondent did not respond to inquiries relative to the Was he illegally dismissed?
investigation.  Instead, respondent filed the instant case against the university.
Petitioner contends that respondent did not attain permanent status since he did not
The Labor Arbiter ruled that respondent was lawfully dismissed because he had not carry a load of at least 18 units for three consecutive years; and that only full-time
attained permanent or regular status pursuant to the Manual of Regulations for Private teachers can attain permanent status.  Further, since respondent was not a permanent
Schools.  The Labor Arbiter held that only full-time teachers with regular loads of at least employee, the twin-notice requirement in the termination of the latter’s employment did
18 units, who have satisfactorily completed three consecutive years of service qualify as not apply.
permanent or regular employees. [3]
Respondent argues that, as early as 1995, he had a permanent appointment as Assistant
On appeal by respondent, the National Labor Relations Commission (NLRC) reversed the Professor, and he was a permanent employee regardless of the provisions of the Manual
Decision of the Labor Arbiter and ordered the reinstatement of respondent without loss of Regulations for Private Schools.  He asserts that he should not be faulted for not
of seniority rights and privileges with full backwages from the time his salaries were carrying a load of at least 18 units since the university unilaterally controls his load
withheld until actual reinstatement.[4] It held that respondent was a full-time teacher as assignment in the same manner that the university has the prerogative to shorten his
he did not appear to have other regular remunerative employment and was paid on a probationary period.  He points out also that the present Manual allows full-time teachers
regular monthly basis regardless of the number of teaching hours.  As a full-time teacher to hold other remunerative positions as long as these do not conflict with the regular
and having taught for more than 3 years, respondent qualified as a permanent or regular school day. Since he is a permanent employee, respondent insists that petitioner’s failure
employee of the university. to give him the required notices constitutes illegal dismissal.

Petitioner sought for reconsideration and pointed out that respondent was also working Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time

40
teachers who have satisfactorily completed their probationary period shall be considered university presented his teaching record.  With a teaching load of twelve units or less, he
regular or permanent.[6] Furthermore, the probationary period shall not be more than six could not claim he worked for the number of hours daily as prescribed by Section 45 of
consecutive regular semesters of satisfactory service for those in the tertiary level. [7] the Manual.  Furthermore, the records also indubitably show he was employed elsewhere
Thus, the following requisites must concur before a private school teacher acquires from 1993 to 1996.
permanent status: (1) the teacher is a full-time teacher; (2) the teacher must have
rendered three consecutive years of service; and (3) such    service must have been Since there is no showing that respondent worked on a full-time basis for at least three
satisfactory.[8] years, he could not have acquired a permanent status. [11] A part-time employee does not
attain permanent status no matter how long he has served the school. [12] And as a part-
In the present case, petitioner claims that private respondent lacked the requisite years timer, his services could be terminated by the school without being held liable for illegal
of service with the university and also the    appropriate quality of his service, i.e., it is less dismissal. Moreover, the requirement of twin-notice applicable only to regular or
than satisfactory.  The basic question, however, is whether respondent is a full-time permanent employees could not be invoked by respondent.
teacher.
Yet, this is not to say that part-time teachers may not have security of tenure.  The school
Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time could not lawfully terminate a part-timer before the end of the agreed period without just
academic personnel are those meeting all the following requirements: cause.  But once the period, semester, or term ends, there is no obligation on the part of
the school to renew the contract of employment for the next period, semester, or term.
Who possess at least the minimum academic qualifications prescribed by the
Department under this Manual for all academic personnel; In this case, the contract of employment of the respondent was not presented.  However,
judicial notice may be taken that contracts of employment of part-time teachers are
Who are paid monthly or hourly, based on the regular teaching loads as generally on a per semester or term basis.  In the absence of a specific agreement on the
provided for in the policies, rules and standards of the Department and the period of the contract of employment, it is presumed to be for a term or semester.  After
school; the end of each term or semester, the school does not have any obligation to give teaching
load to each and every part-time teacher.  That petitioner did not give any teaching
Whose total working day of not more than eight hours a day is devoted to the assignment to the respondent during a given term or semester, even if factually true, did
school; not amount to an actionable violation of respondent’s rights.  It did not amount to illegal
dismissal of the part-time teacher.
Who have no other remunerative occupation elsewhere requiring regular
hours of work that will conflict with the working hours in the school; and The law, while protecting the rights of the employees, authorizes neither the oppression
nor destruction of the employer. [13] And when the law tilts the scale of justice in favor of
Who are not teaching full-time in any other educational institution. labor, the scale should never be so tilted if the result would be an injustice to the
employer.[14]
All teaching personnel who do not meet the foregoing qualifications are
considered part-time. WHEREFORE, the petition is GRANTED.  The Decision dated May 21, 2002 and the
Resolution dated February 12, 2003 of the Court of Appeals in CA-G.R. SP No. 63240,
A perusal of the various orders of the then Department of Education, Culture and Sports which sustained those of the NLRC, are NULLIFIED and SET ASIDE.  The Decision of the
prescribing teaching loads shows that the regular full-time load of a faculty member is in Executive Labor Arbiter of the Regional Arbitration Branch II, Tuguegarao City, Cagayan,
the range of 15 units to 24 units a semester or term, depending on the courses taught.  is hereby REINSTATED.
Part-time instructors carry a load of not more than 12 units. [9]
SO ORDERED.
The evidence on record reveals that, except for four non-consecutive terms, respondent
generally carried a load of twelve units or less from 1992 to 1999.  There is also no Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
evidence that he performed other functions for the school when not teaching.  These give
the impression that he was merely a part-time teacher. [10] Although this is not conclusive
since there are full-time teachers who are allowed by the university to take fewer load, in
this case, respondent did not show that he belonged to the latter group, even after the

41
 error in the entry in the logbook.  Subsequently, she asked private respondent to prepare
FIRST DIVISION an incident report to explain the reason for the said oversight. [7]
G.R. NO. 168052, February 20, 2006
POSEIDON FISHING/TERRY DE JESUS, PETITIONERS, VS. NATIONAL LABOR At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary,
RELATIONS COMMISSION AND JIMMY S. ESTOQUIA, RESPONDENTS. namely Nenita Laderas, summoned private respondent to get his separation pay
amounting to Fifty-Five Thousand Pesos (P55,000.00).  However, he refused to accept the
DECISION amount as he believed that he did nothing illegal to warrant his immediate discharge
from work.[8]
CHICO-NAZARIO, J.:
Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July
Article 280 of the Labor Code, in its truest sense, distinguishes between regular and 2000 with the Labor Arbiter, alleging nonpayment of wages with prayer for back wages,
casual employees to protect the interests of labor.  Its language evidently manifests the damages, attorney’s fees, and other monetary benefits.
intent to safeguard the tenurial interest of the worker who may be denied the rights and
benefits due a regular employee by virtue of lopsided agreements with the economically In private respondent’s position paper, he averred that petitioner Poseidon employed
powerful employer who can maneuver to keep an employee on a casual status for as long him as a Chief Mate sometime in January 1988.  He claimed that he was promoted to the
as convenient.[1] position of Boat Captain five years after. However, in 1999, he    was demoted from Boat
Captain to Radio Operator without any reason and shortly, he was terminated without
This petition assails the Decision[2] of the Court of Appeals dated 14 March 2005 in CA- just cause and without due process of law.
G.R. SP No. 81140 entitled, “Poseidon Fishing/Terry De Jesus v. National Labor Relations
Commission and Jimmy S. Estoquia” which affirmed that of the National Labor Relations Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private
Commission (NLRC). The NLRC had affirmed with modification the Decision dated 5 respondent was a contractual or a casual employee whose services could be terminated
December 2000 of Labor Arbiter Melquiades Sol D. Del Rosario in NLRC-NCR Case No. 00- at the end of the contract even without a just or authorized cause in view of Article 280 of
07-03625-00, declaring private respondent to have been illegally dismissed and entitled the Labor Code, which provides:
to backwages and separation pay. Art. 280. Regular and Casual Employment. – The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
As thoroughly told by the Court of Appeals and the Labor Arbiter, the particulars are employment shall be deemed to be regular where the employee has been engaged to
beyond dispute: perform activities which  are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing undertaking the completion or termination of which has been determined at the time of the
industry.  Its various vessels catch fish in the outlying islands of the Philippines, which engagement of the employee or    where the work or services to be performed is seasonal in
are traded and sold at the Navotas Fish Port.  One of its boat crew was private respondent nature and the employment is for the duration of the season.
Jimmy S. Estoquia.[3] Petitioner Terry de Jesus is the manager of petitioner company.
An employment shall be deemed to be casual if it is not covered by the preceding
Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. paragraph: Provided, That any employee who has rendered at least one year of service,
After five years, he was promoted to Boat Captain. In 1999, petitioners, without reason, whether such service is continuous or broken, shall be considered a regular employee
demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon. [4] As a with respect to the activity in which he is employed and his employment shall continue
Radio Operator, he monitored the daily activities in their office and recorded in the duty while such actually exists. (Emphasis supplied.)
logbook the names of the callers and time of their calls. [5] Petitioners further posited that when the private respondent was engaged, it was made
clear to him    that he was being employed only on a “por viaje” or per trip basis and that
On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks.  his employment would be terminated at the end of the trip for which he was being hired. 
However, he was able to record the same in the other logbook.  Consequently, when he As such, the private respondent could not be entitled to separation pay and other
reviewed the two logbooks, he noticed that he was not able to record the said call in one monetary claims.
of the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. [6]
On 5 December 2000, following the termination of the hearing of the case, the Labor
Around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de Jesus detected the Arbiter decided in favor of private respondent.  The Labor Arbiter held that even if the

42
private respondent was a casual employee, he became a regular employee after a period
of one year and, thereafter, had attained tenurial security which could only be lost due to I.
a legal cause after observing due process.  The dispositive portion of the Decision reads:
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT WAS
complainant to have been illegally dismissed and so must immediately be reinstated to A REGULAR EMPLOYEE WHEN IN TRUTH HE WAS A
his former position as radio operator and paid by respondent[s] in solidum his backwages CONTRACTUAL/PROJECT/SEASONAL EMPLOYEE.
which as of December 3, 2000 had already accumulated in the sum of P35,880.00 plus his
unpaid one (1) week salary in the sum of P1,794.00. II.

Respondents are further ordered to pay attorney’s fees in a sum equivalent to 10% of the THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT
awarded claims.[9] WAS ILLEGALLY DISMISSED FROM EMPLOYMENT.
Consequently, the petitioners filed their Memorandum of Appeal with the NLRC for the
reversal of the aforesaid decision.  On 24 September 2002, the NLRC affirmed the III.
decision of the Labor Arbiter with the modification, inter alia, that: (a) the private
respondent would be paid his separation pay equivalent to one-half of his monthly pay THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THE RESPONDENT
for every year of service that he has rendered in lieu of reinstatement; and (b) an amount A SEASONAL EMPLOYEE AND APPLYING THE RULING IN RJL MARTINEZ FISHING
equivalent to six months salary should be deducted from his full backwages because it CORPORATION vs. NLRC THAT “THE ACTIVITY OF FISHING IS A CONTINUOUS PROCESS
was his negligence in the performance of his work that brought about his termination.  It AND COULD HARDLY BE CONSIDERED AS SEASONAL IN NATURE.”
held:
IV.
WHEREFORE, the decision is modified as follows:
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT IS
The amount equivalent to six (6) months salary is to be deducted from the ENTITLED TO BACKWAGES, SEPARATION PAY, ATTORNEY’S FEES AND OTHER
total award of backwages; MONETARY BENEFITS.

The respondent is ordered to pay complainant separation pay equivalent to V.

one-half (1/2) month pay for every year of service counted from 1998; x x x
THE HONORABLE COURT OF APPEALS ERRED IN NOT RESOLVING THE PRAYER FOR
The respondent is ordered to pay complainant’s unpaid wages in the amount THE ISSUANCE OF PRELIMINARY INJUNCTION AND/OR TEMPORARY RESTRAINING
of P1,794.00; and ORDER.[12]
Respondent is ordered to pay attorney’s fees in a sum equivalent to ten
percent (10%) of the awarded claims.[10] The fundamental issue entails the determination of the nature of the contractual
relationship between petitioners and private respondent, i.e., was private respondent a
Petitioners moved for the reconsideration of the NLRC decision, but were denied in a regular employee at the time his employment was terminated on 04 July 2000?
Resolution dated 29 August 2003.
Asserting their right to terminate the contract with private respondent per the
Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse “Kasunduan” with him, petitioners pointed to the provision thereof stating that he was
of discretion, but the Court of Appeals found none. The following is the fallo of the being employed    only on a ‘’por viaje’’ basis and that his employment would be
decision: terminated at the end of the trip for which he was being hired, to wit:

WHEREFORE, the foregoing premises considered, the instant petition is hereby DENIED. NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa
[11]
pag-alis ng lantsa sa pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan
ng lantsa sa Navotas hanggang sa  paghango ng mga kargang isda. [13]
In a last attempt at vindication, petitioners filed the present petition for review with the
following assignment of errors: Petitioners lament that fixed-term employment contracts are recognized as valid under

43
the law notwithstanding the provision of Article 280 of the Labor Code. Petitioners would be possible.[16]  Thus, in Brent, the acid test in considering fixed-term contracts as
theorize that the Civil Code has always recognized the validity of contracts with a fixed valid is: if from the circumstances it is apparent that periods have been imposed to
and definite period, and imposes no restraints on the freedom of the parties to fix the preclude acquisition of tenurial security by the employee, they should be
duration of the contract, whatever its object, be it species, goods or services, except the disregarded for being contrary to public policy.
general admonition against stipulations contrary to law, morals, good customs, public
order and public policy.  Quoting Brent School Inc. v. Zamora,[14] petitioners are hamstrung On the same tack as Brent, the Court in Pakistan International Airlines Corporation v. Ople,
[17]
on their reasoning that under the Civil Code, fixed-term employment contracts are not ruled in this wise:
limited, as they are under the present Labor Code, to those that by their nature are
seasonal or for specific projects with pre-determined dates of completion as they also It is apparent from Brent School that the critical consideration is the presence or absence
include those to which the parties by free choice have assigned a specific date of of a substantial indication that the period specified in an employment agreement was
termination.  Hence, persons may enter into such contracts as long as they are designed to circumvent the security of tenure of regular employees which is provided for
capacitated to act, petitioners bemoan. in Articles 280 and 281 of the Labor Code.  This indication must ordinarily rest upon
some aspect of the agreement other than the mere specification of a fixed term of the
We are far from persuaded by petitioners’ ratiocination. employment agreement, or upon evidence aliunde of the intent to evade.

Petitioners’ construal of Brent School, Inc. v. Zamora, has certainly gone astray. The Consistent with the pronouncements in these two earlier cases, the Court, in Cielo v.
subject of scrutiny in the Brent case was the employment contract inked between the National Labor Relations Commission,[18] did not hesitate to nullify employment contracts
school and one engaged as its Athletic Director. The contract fixed a specific term of five stipulating a fixed term after finding that “the purpose behind these individual
years from the date of execution of the agreement. This Court upheld the validity of the contracts was to evade the application of the labor laws.”
contract between therein petitioner and private respondent, fixing the latter’s period of
employment.  This Court laid down the following criteria for judging the validity of such In the case under consideration, the agreement has such an objective - to frustrate the
fixed-term contracts, to wit: security of tenure of private respondent- and fittingly, must be nullified. In this case,
Accordingly, and since the entire purpose behind the development of legislation petitioners’ intent to evade the application of Article 280 of the Labor Code is
culminating in the present Article 280 of the Labor Code clearly appears to have been, as unmistakable. In a span of 12 years, private respondent worked for petitioner company
already observed, to prevent circumvention of the employee’s right to be secure in his first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly
tenure, the clause in said article indiscriminately and completely ruling out all written or related to the deep-sea fishing business of petitioner Poseidon.  His work was, therefore,
oral agreements conflicting with the concept of regular employment as defined therein necessary and important to the business of his employer.  Such being the scenario
should be construed to refer to the substantive evil that the Code itself has singled out:  involved, private respondent is considered a regular employee of petitioner under Article
agreements entered into precisely to circumvent security of tenure.  It should have no 280 of the Labor Code, the law in point, which provides:
application to instances where a fixed period of employment was agreed upon knowingly
and voluntarily by the parties, without any force, duress or improper pressure being Art. 280. Regular and Casual Employment. – The provisions of written agreement to the
brought to bear upon the employee and absent any other circumstances vitiating his contrary notwithstanding and regardless of the oral agreement of the parties, an
consent, or where it satisfactorily appears that the employer and employee dealt with each employment shall be deemed to be regular where the employee has been engaged to
other on more or less equal terms with no moral dominance whatever being exercised by perform activities which  are usually necessary or desirable in the usual business or trade
the former over the latter.  Unless thus limited in its purview, the law would be made to of the employer, except where the employment has been fixed for a specific project or
apply to purposes other than those explicitly stated by its framers; it thus becomes undertaking the completion or termination of which has been determined at the time of
pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended the engagement of the employee or where the work or services to be performed is
consequences.[15] (Emphasis supplied.) seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
Brent cited some familiar examples of employment contracts which may neither be for paragraph: Provided, That any employee who has rendered at least one year of service,
seasonal work nor for specific projects, but to which a fixed term is an essential and whether such service is continuous or broken, shall be considered a regular employee
natural appurtenance, i.e., overseas employment contracts, appointments to the positions with respect to the activity in which he is employed and his employment shall continue
of dean, assistant dean, college secretary, principal, and other administrative offices in while such actually exists. (Emphasis supplied.)
educational institutions, which are by practice or tradition rotated among the faculty Moreover, unlike in the Brent case where the period of the contract was fixed and clearly
members, and where fixed terms are a necessity without which no reasonable rotation stated, note that in the case at bar, the terms of employment of private respondent as

44
provided in the Kasunduan was not only vague, it also failed to provide an actual or whether such service is continuous or broken, shall be considered a regular employee
specific date or period for the contract.  As adroitly observed by the Labor Arbiter: with respect to the activity in which he is employed and his employment shall continue
while such activity exists.
There is nothing in the contract that says complainant, who happened to be the captain of
said vessel, is a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the This provision draws a line between regular and casual employment, a distinction
heading “Pagdating” had been placed there merely to indicate the possible date of arrival of however often abused by employers.  The provision enumerates two (2) kinds of
the vessel and is not an indication of the status of employment of the crew of the vessel. employees, the regular employees and the casual employees.  The regular employees
consist of the following:
Actually, the exception under Article 280 of the Labor Code in which the respondents
have taken refuge to justify its position does not apply in the instant case. The proviso, 1) those engaged to perform activities which are usually necessary or desirable in the
“Except where the employment has been fixed for a specific project or undertaking the usual business or trade of the employer; and
completion or determination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal 2) those who have rendered at least one year of service whether such service is
in nature and the employment is for the duration of the season.” (Article 280 Labor continuous or broken.[23]
Code), is inapplicable because the very contract adduced by respondents is unclear and Ostensibly, in the case at bar, at different times, private respondent occupied the position
uncertain. The kasunduan does not specify the duration that complainant had been hired x of Chief Mate, Boat Captain, and Radio Operator. In petitioners’ interpretation, however,
x x.[19] (Emphasis supplied.) this act of hiring and re-hiring actually highlight private respondent’s contractual status
saying that for every engagement, a fresh contract was entered into by the parties at the
Furthermore, as petitioners themselves admitted in their petition before this Court, outset as the conditions of employment changed when the private respondent filled in a
private respondent was repeatedly hired as part of the boat’s crew and he acted in different position.  But to this Court, the act of hiring and re-hiring in various capacities is
various capacities onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. a mere gambit employed by petitioner to thwart the tenurial protection of private
v. National Labor Relations Commission,[20] we held that the test to determine whether respondent.  Such pattern of re-hiring and the recurring need for his services are
employment is regular or not is the reasonable connection between the particular activity testament to the necessity and indispensability of such services to petitioners’ business
performed by the employee in relation to the usual business or trade of the employer.  or trade.[24]
And, if the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and Petitioners would brush off private respondent’s length of service by stating that he had
continuing need for its performance as sufficient evidence of the necessity, if not worked for the company merely for several years[25] and that in those times, his services
indispensability of that activity to the business. [21] were not exclusive to petitioners.  On the other hand, to prove his claim that he had
continuously worked for petitioners from 1988 to 2000, private respondent submitted a
In Bustamante v. National Labor Relations Commission,[22] the Court expounded on what copy of his payroll[26] from 30 May 1988 to October 1988 and a copy of his SSS Employees
are regular employees under Article 280 of the Labor Code, viz: Contributions[27] as of the year 2000.  These documents were submitted by private
It is undisputed that petitioners were illegally dismissed from employment. Article 280 of respondent in order to benchmark his claim of 12 years of service.   Petitioners, however,
the Labor Code, states: failed to submit the pertinent employee files, payrolls, records, remittances and other
similar documents  which  would show that private respondent’s work was not
ART. 280. Regular and Casual Employment. - The provisions of written agreement to the continuous and for less than 12 years.  Inasmuch as these documents are not in private
contrary notwithstanding and regardless of the oral agreement of the parties, an respondent’s possession but in the custody and absolute control of petitioners, their
employment shall be deemed to be regular where the employee has been engaged to failure to refute private respondent’s evidence or even categorically deny private
perform activities which are usually necessary or desirable in the usual business or trade respondent’s allegations lead us to no other conclusion than that private respondent was
of the employer, except where the employment has been fixed for a specific project or hired in 1988 and had been continuously in its employ since then. Indeed, petitioners’
undertaking the completion or termination of which has been determined at the time of failure to submit the necessary documents, which as employers are in their possession,
the engagement of the employee or where the work or services to be performed is gives rise to the presumption that their presentation is prejudicial to its cause. [28]
seasonal in nature and the employment is for the duration of the season.
To recapitulate, it was after 12 long years of having private respondent under its wings
An employment shall be deemed to be casual if it is not covered by the preceding when petitioners, possibly sensing a brewing brush with the law as far as private
paragraph: Provided, that, any employee who has rendered at least one year of service, respondent’s employment is concerned, finally found a loophole to kick private

45
respondent out when the latter failed to properly record a 7:25 a.m. call.  Capitalizing on
this faux pas, petitioner summarily dismissed private respondent. On this note, we More to the point, in Maraguinot, Jr. v. National Labor Relations Commission,[35] we ruled
disagree with the finding of the NLRC that private respondent was negligent on account that once a project or work pool employee has been: (1) continuously, as opposed to
of his failure to properly record a call in the log book.  A review of the records would intermittently, re-hired by the same employer for the same tasks or nature of tasks; and
ineluctably show that there is no basis to deduct six months’ worth of salary from the (2) these tasks are vital, necessary and indispensable to the usual business or trade of the
total separation pay that private respondent is entitled to. We note further that the employer, then the employee must be deemed a regular employee.
NLRC’s finding clashes with that of the Labor Arbiter which found no such negligence and
that such inadvertence on the part of private respondent, at best, constitutes simple In fine, inasmuch as private respondent’s functions as described above are no doubt
negligence punishable only with admonition or suspension for a day or two. “usually necessary or desirable in the usual business or trade” of petitioner fishing
company and he was hired continuously for 12 years for the same nature of tasks, we are
As the records bear out, private respondent himself seasonably realized his oversight and constrained to say that he belongs to the ilk of regular employee.  Being one, private
in no time recorded the 7:25 a.m. call after the 7:30 a.m. call. Gross negligence under respondent’s dismissal without valid cause was illegal. And, where illegal dismissal is
Article 282 of the Labor Code, [29] as amended, connotes want of care in the performance proven, the worker is entitled to back wages and other similar benefits without
of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for deductions or conditions.[36]
a period of time, depending upon the circumstances. [30]  Here, it is not disputed that
private respondent corrected straight away the recording of the call and petitioners failed Indeed, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of
to prove the damage or injury that such inadvertence caused the company. We find, as the some of our entrepreneurs, primarily aimed at maximizing their return on investments at
Labor Arbiter[31] had found, that there is no sufficient evidence on record to prove private the expense of the lowly workingman.[37]
respondent’s negligence, gross or simple for that matter, in the performance of his duties
to warrant a reduction of six months salary from private respondent’s separation pay.  WHEREFORE, the present petition is hereby DENIED.  The Decision of the Court of
Moreover, respondent missed to properly record, not two or three calls, but just a single Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 is hereby AFFIRMED WITH
call. It was also a first infraction on the part of private respondent, not to mention that the MODIFICATION by deleting the reduction of an amount equivalent to six months of pay
gaffe, if at all, proved to be innocuous. Thus, we find such slip to be within tolerable range. from private respondent’s separation pay.  The case is remanded to the Labor Arbiter for
After all, is it not a rule[32] that in carrying out and interpreting the provisions of the Labor further proceedings solely for the purpose of determining the monetary liabilities of
Code and its implementing regulations, the workingman's welfare should be primordial? petitioners in accordance with the decision. The Labor Arbiter is ORDERED to submit his
compliance thereon within thirty (30) days from notice of this decision, with copies
Petitioners next assert that deep-sea fishing is a seasonal industry because catching of furnished to the parties.  Costs against petitioners.
fish could only be undertaken for a limited duration or seasonal within a given year. Thus,
according to petitioners, private respondent was a seasonal or project employee. SO ORDERED.

We are not won over. Panganiban, C.J., (Chairman), Ynares-Santiago and Austria-Martinez, JJ.,  concur.
Callejo, Sr., J. on leave.
As correctly pointed out by the Court of Appeals, the “activity of catching fish is a
continuous process and could hardly be considered as seasonal in nature.” [33]  In Philex
Mining Corp. v. National Labor Relations Commission,[34] we defined project employees as
those workers hired (1) for a specific project or undertaking, and (2) the completion or
termination of such project has been determined at the time of the engagement of the
employee. The principal test for determining whether particular employees are “project
employees” as distinguished from “regular employees,” is whether or not the “project
employees” were assigned to carry out a “specific project or undertaking,” the duration
and scope of which were specified at the time the employees were engaged for that
project.  In this case, petitioners have not shown that private respondent was informed
that he will be assigned to a “specific project or undertaking.”  As earlier noted, neither
has it been established that he was informed of the duration and scope of such project or
undertaking at the time of their engagement.

46
 SECOND DIVISION
G.R. NO. 149985, May 05, 2006
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., PETITIONER, VS.
ROSALINA C. ARCEO,*** RESPONDENT.

RESOLUTION
CORONA, J.:

This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure assailing
the decision[1] of the Court of Appeals (CA) dismissing the petition for certiorari filed by
petitioner.

In May 1990, respondent Rosalina Arceo (Arceo) applied for the position of telephone
operator with petitioner Philippine Long Distance Telephone Company, Inc. - Tarlac
Exchange (PLDT). She, however, failed the pre-employment qualifying examination.
Having failed the test, Arceo requested PLDT to allow her to work at the latter's office
even without pay. PLDT agreed and assigned her to its commercial section where she was
made to perform various tasks like photocopying documents, sorting out telephone bills
and notices of disconnection, and other minor assignments and activities. After two
weeks, PLDT decided to pay her the minimum wage.

On February 15, 1991, PLDT saw no further need for Arceo's services and decided to fire
her but, through the intervention of PLDT's commercial section supervisor, Mrs. Beatriz
Mataguihan, she was recommended for an on-the-job training on minor traffic work.
When she failed to assimilate traffic procedures, the company transferred her to auxiliary
services, a minor facility.

Subsequently, Arceo took the pre-qualifying exams for the position of telephone operator
two more times but again failed in both attempts.

Finally, on October 13, 1991, PLDT discharged Arceo from employment. She then filed a
case for illegal dismissal before the labor arbiter.[2] On May 11, 1993, the arbiter ruled in
her favor. PLDT was ordered to reinstate Arceo to her "former position or to an
equivalent position." This decision became final and executory.

On June 9, 1993, Arceo was reinstated as casual employee with a minimum wage of P106
per day. She was assigned to photocopy documents and sort out telephone bills.

On September 3, 1996 or more than three years after her reinstatement, Arceo filed a
complaint for unfair labor practice, underpayment of salary, underpayment of overtime
pay, holiday pay, rest day pay and other monetary claims. She alleged in her complaint
that, since her reinstatement, she had yet to be regularized and had yet to receive the
benefits due to a regular employee.

On August 18, 1997, labor arbiter Dominador B. Saludares ruled that Arceo was already

47
qualified to become a regular employee. He also found that petitioner denied her all the
benefits and privileges of a regular employee. The dispositive portion of his decision Rebuffed, PLDT went to the CA via a petition for certiorari [6] and ascribed grave abuse of
read: discretion on the part of the NLRC for considering Arceo a regular employee by operation
WHEREFORE, premises considered, judgment is hereby rendered declaring of law.
respondent guilty of wanton disregard of the right of herein complainant to
become a regular employee. Concomitantly, respondent is hereby ordered to pay On June 29, 2001, the CA affirmed the contested decision of the NLRC. It held:
complainant the following accrued benefits and privileges from May 11, 1993 up to the
present: xxx It is doctrinaire that in determining what constitutes regular employment, what is
1. Underpayment -------- P181,395.00 considered [as] the reasonable connection between the particular activity
2. Overtime pay -------- 2,598.00 performed by the employee in relation to the usual business or trade of the
3. Premium pay -------- 753.00 employer, i.e. if the work is usually necessary or desirable in the usual business or
4. Allowance for Uniform -------- 20,000.00 trade of the employer. xxx And even granting the argument of petitioner that the
5. Cash gift -------- 9,000.00 nature of Arceo's work is casual or temporary, still she had been converted into a
6. 13th month pay -------- 45,946.17 regular employee by virtue of the proviso in the second paragraph of Article 280
7. Mid-year bonus -------- 14,884.57 for having worked with PLDT for more than one (1) year.[7] (emphasis supplied)
8. Longevity pay -------- 5, 314.50 The CA likewise denied PLDT's motion for reconsideration. Hence, this petition.
9. Sick leave -------- 6,354.30
10. Rice Subsidy -------- 27,250.00 PLDT argues that while Article 280 of the Labor Code "regularizes" a casual employee
11. Zero backlog -------- 2,000.00 who has rendered at least one year of service (whether continuous or broken) the
Total P316,496.24 proviso is subject to the condition that the employment subsists or the position still
Likewise, respondent is hereby ordered to pay attorney's fees in the sum of P31,649.62 exists. Even if Arceo had rendered more than one year of service as a casual employee,
which is equivalent to ten [percent] (10%) of the amount awarded to complainant. PLDT insisted that this fact alone would not automatically make her a regular employee
since her position had long been abolished. PLDT also argues that it would be an even
The claim for damages is dismissed for lack of merit. [3] (emphasis supplied) greater error if Arceo were to be "regularized" as a telephone operator since she
repeatedly failed the qualifying exams for that position.
The National Labor Relations Commission (NLRC) took cognizance of the case on appeal.
On November 28, 1997, it affirmed the decision of the labor arbiter only insofar as it Thus, the main issue in this case: is Arceo eligible to become a regular employee of PLDT?
found Arceo eligible to become a regular employee. With respect to her monetary claims, Yes.
the NLRC remanded the case to the arbiter for reception of evidence. [4] It held:
Article 280 of the Labor Code, as amended, provides:
It is evidently a facetious averment emanating from the respondent that the complainant Art. 280. Regular and Casual Employment. â ”€ The provisions of written agreement to the
should forever remain a casual employee. Not only is such argument wanting in merit, it contrary notwithstanding and regardless of the oral agreement of the parties, an
clearly goes against the principle that the conferment of regular status to an employee is employment shall be deemed to be regular where the employee has been engaged
by operation of law. xxx to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
With respect to the money claims, it is our opinion that the complainant is not entitled project or undertaking the completion or termination of which has been determined at
thereto insofar as her claims for 1993 is concerned for having been filed beyond the three the time of engagement of the employee or where the work or services to be performed is
year prescriptive period. However, as it concerns the claims for the period 1994 to 1996, seasonal in nature and employment is for the duration of the season.
it is Our view that the complainant is entitled, not only because it is within the
prescriptive period but also on account of the continuous and unabated violation of the An employment shall be deemed to be casual if it is not covered by the preceding
respondent in regard to the deprivation to the complainant not only of her rightful status paragraph. Provided, that, any employee who has rendered at least one year of
as a regular employee but more particularly to the grant of the appropriate salaries and service, whether such service is continuous or broken, shall be considered a
benefits.[5] regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (emphasis ours)
PLDT sought a reconsideration of the decision but the NLRC rejected it for lack of merit.

48
Under the foregoing provision, a regular employee is (1) one who is either engaged to
perform activities that are necessary or desirable in the usual trade or business of the
employer or (2) a casual employee who has rendered at least one year of service,
whether continuous or broken, with respect to the activity in which he is employed.

Under the first criterion, respondent is qualified to be a regular employee. Her work,
consisting mainly of photocopying documents, sorting out telephone bills and
disconnection notices, was certainly "necessary or desirable" to the business of PLDT. But
even if the contrary were true, the uncontested fact is that she rendered service for more
than one year as a casual employee. Hence, under the second criterion, she is still eligible
to become a regular employee.

Petitioner's argument that respondent's position has been abolished, if indeed true, does
not preclude Arceo's becoming a regular employee. The order to reinstate her also
included the alternative to reinstate her to "a position equivalent thereto." Thus, PLDT
can still "regularize" her in an equivalent position.

Moreover, PLDT's argument does not hold water in the absence of proof that the activity
in which Arceo was engaged (like photocopying of documents and sorting of telephone
bills) no longer subsists. Under Article 280, any employee who has rendered at least one
year of service "shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity exists." For PLDT's
failure to show that the activity undertaken by Arceo has been discontinued, we are
constrained to confirm her "regularization" in that position.

From what date will she be entitled to the benefits of a regular employee? Considering
that she has already worked in PLDT for more than one year at the time she was
reinstated, she should be entitled to all the benefits of a regular employee from June 9,
1993 _ the day of her actual reinstatement.

PLDT's other contention that the "regularization" of respondent as telephone operator

was not possible since she failed in three qualifying exams for that position is also
untenable. It is understood that she will be regularized in the position she held prior to
the filing of her complaint with the labor arbiter, or, if that position was already
abolished, to an equivalent position. The position of telephone operator was never even
considered in any of the assailed decisions of the labor arbiter, the NLRC or the CA.

WHEREFORE, this petition is DENIED.

Costs against petitioner.

SO ORDERED.

Sandoval-Gutierrez, (Acting Chairperson), Azcuna, and Garcia, JJ., concur.

Puno, (Chairperson), J. on leave.

49
 A local station, like the Cebu station, can resort to cost-effective and cost-saving measures
SECOND DIVISION to remain viable; local stations produced shows and programs that were constantly
G.R. No. 183810, January 21, 2010 changing because of the competitive nature of the industry, the changing public demand
FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO, JEFFREY LAGUNZAD, or preference, and the seasonal nature of media broadcasting programs. ABS-CBN
MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY PONCE AND ALAN claimed, too, that the production of programs per se is not necessary or desirable in its
C. ALMENDRAS, PETITIONERS, VS. ABS-CBN BROADCASTING CORPORATION, business because it could generate profits by selling airtime to block-timers or through
RESPONDENT. advertising.

DECISION ABS-CBN further claimed that to cope with fluctuating business conditions, it contracts on
BRION, J.: a case-to-case basis the services of persons who possess the necessary talent, skills,
training, expertise or qualifications to meet the requirements of its programs and
The petition for review on certiorari[1] now before us seeks to set aside the decision [2] and productions. These contracted persons are called "talents" and are considered
resolution[3] of the Court of Appeals, Nineteenth Division (CA) promulgated on March 25, independent contractors who offer their services to broadcasting companies.
2008 and July 8, 2008, respectively, in CA- G.R. SP No. 01838. [4]
Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged
The Antecedents consideration called "talent fee" taken from the budget of a particular program and
subject to a ten percent (10%) withholding tax. Talents do not undergo probation. Their
The Regularization Case. services are engaged for a specific program or production, or a segment thereof. Their
contracts are terminated once the program, production or segment is completed.
In June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey
Lagunzad, Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. ABS-CBN alleged that the petitioners' services were contracted on various dates by its
Almendras (petitioners) and Cresente Atinen (Atinen) filed two separate complaints for Cebu station as independent contractors/off camera talents, and they were not entitled to
regularization, unfair labor practice and several money claims (regularization case) regularization in these capacities.
against ABS-CBN Broadcasting Corporation-Cebu (ABS-CBN). Fulache and Castillo were
drivers/cameramen; Atinen, Lagunzad and Jabonero were drivers; Ponce and Almendras On January 17, 2002, Labor Arbiter Rendoque rendered his decision [5] holding that the
were cameramen/editors; Bigno was a PA/Teleprompter Operator-Editing, and Cabas petitioners were regular employees of ABS-CBN, not independent contractors, and are
was a VTR man/editor. The complaints (RAB VII Case Nos. 06-1100-01 and 06-1176-01) entitled to the benefits and privileges of regular employees.
were consolidated and were assigned to Labor Arbiter Julie C. Rendoque.
ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC) Fourth
The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and- Division, mainly contending that the petitioners were independent contractors, not
File Employees Union (Union) executed a collective bargaining agreement (CBA) effective regular employees.[6]
December 11, 1999 to December 10, 2002; they only became aware of the CBA when they
obtained copies of the agreement; they learned that they had been excluded from its The Illegal Dismissal Case.
coverage as ABS-CBN considered them temporary and not regular employees, in violation
of the Labor Code. They claimed they had already rendered more than a year of service in While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache,
the company and, therefore, should have been recognized as regular employees entitled Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts
to security of tenure and to the privileges and benefits enjoyed by regular employees. of employment with service contractor Able Services. The four drivers and Atinen
They asked that they be paid overtime, night shift differential, holiday, rest day and responded by filing a complaint for illegal dismissal (illegal dismissal case). The case
service incentive leave pay. They also prayed for an award of moral damages and (RAB VII Case No. 07-1300-2002) was likewise handled by Labor Arbiter Rendoque.
attorney's fees.
In defense, ABS-CBN alleged that even before the labor arbiter rendered his decision of
ABS-CBN explained the nature of the petitioners' employment within the framework of January 17, 2002 in the regularization case, it had already undertaken a comprehensive
its operations. It claimed that: it operates in several divisions, one of which is the review of its existing organizational structure to address its operational requirements. It
Regional Network Group (RNG). The RNG exercises control and supervision over all the then decided to course through legitimate service contractors all driving, messengerial,
ABS-CBN local stations to ensure that ABS-CBN programs are extended to the provinces. janitorial, utility, make-up, wardrobe and security services for both the Metro Manila and

50
provincial stations, to improve its operations and to make them more economically neither was there evidence to support this finding.
viable. Fulache, Jabonero, Castillo, Lagunzad and Atinen were not singled out for
dismissal; as drivers, they were dismissed because they belonged to a job category that The NLRC resolved the motions for reconsideration on March 24, 2006 [10] by reinstating
had already been contracted out. It argued that even if the petitioners had been found to the two separate decisions of the labor arbiter dated January 17, 2002, [11] and April 21,
have been illegally dismissed, their reinstatement had become a physical impossibility 2003,[12] respectively. Thus, on the regularization issue, the NLRC stood by the ruling that
because their employer-employee relationships had been strained and that Atinen had the petitioners were regular employees entitled to the benefits and privileges of regular
executed a quitclaim and release. employees. On the illegal dismissal case, the petitioners, while recognized as regular
employees, were declared dismissed due to redundancy. The NLRC denied the
In her April 21, 2003 decision in the illegal dismissal case, [7] Labor Arbiter Rendoque petitioners' second motion for reconsideration in its order of May 31, 2006 for being a
upheld the validity of ABS-CBN's contracting out of certain work or services in its prohibited pleading. [13]
operations. The labor arbiter found that petitioners Fulache, Jabonero, Castillo, Lagunzad
and Atinen had been dismissed due to redundancy, an authorized cause under the law. [8] The CA Petition and Decision
He awarded them separation pay of one (1) month's salary for every year of service.
The petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules
Again, ABS-CBN appealed to the NLRC which rendered on December 15, 2004 a joint of Court.[14] They charged the NLRC with grave abuse of discretion in: (1) denying them
decision on the regularization and illegal dismissal cases. [9] The NLRC ruled that there the benefits under the CBA; (2) finding no evidence that they are part of the company's
was an employer-employee relationship between the petitioners and ABS-CBN as the bargaining unit; (3) not reinstating and awarding backwages to Fulache, Jabonero,
company exercised control over the petitioners in the performance of their work; the Castillo and Lagunzad; and (4) ruling that they are not entitled to damages and attorney's
petitioners were regular employees because they were engaged to perform activities fees.
usually necessary or desirable in ABS-CBN's trade or business; they cannot be considered
contractual employees since they were not paid for the result of their work, but on a ABS-CBN, on the other hand, questioned the propriety of the petitioners' use of a
monthly basis and were required to do their work in accordance with the company's certiorari petition. It argued that the proper remedy for the petitioners was an appeal
schedule. The NLRC thus affirmed with modification the labor arbiter's regularization from the reinstated decisions of the labor arbiter.
decision of January 17, 2002, additionally granting the petitioners CBA benefits and
privileges. In its decision of March 25, 2008,[15] the appellate court brushed aside ABS-CBN's
procedural question, holding that the petition was justified because there is no plain,
The NLRC reversed the labor arbiter's ruling in the illegal dismissal case; it found that speedy or adequate remedy from a final decision, order or resolution of the NLRC; the
petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed reinstatement of the labor arbiter's decisions did not mean that the proceedings reverted
and awarded them backwages and separation pay in lieu of reinstatement. Under both back to the level of the arbiter. It likewise affirmed the NLRC ruling that the petitioners'
cases, the petitioners were awarded CBA benefits and privileges from the time they second motion for reconsideration is a prohibited pleading under the NLRC rules. [16]
became regular employees up to the time of their dismissal.
On the merits of the case, the CA ruled that the petitioners failed to prove their claim to
The petitioners moved for reconsideration, contending that Fulache, Jabonero, Castillo CBA benefits since they never raised the issue in the compulsory arbitration proceedings,
and Lagunzad are entitled to reinstatement and full backwages, salary increases and and did not appeal the labor arbiter's decision which was silent on their entitlement to
other CBA benefits as well as 13th month pay, cash conversion of sick and vacation leaves, CBA benefits. The CA found that the petitioners failed to show with specificity how
medical and dental allowances, educational benefits and service awards. Atinen appeared Section 1 (Appropriate Bargaining Unit) and the other provisions of the CBA applied to
to have been excluded from the motion and there was no showing that he sought them.
reconsideration on his own.
On the illegal dismissal issue, the CA upheld the NLRC decision reinstating the labor
ABS-CBN likewise moved for the reconsideration of the decision, reiterating that Fulache, arbiter's April 21, 2003 ruling.[17] Thus, the drivers - Fulache, Jabonero, Castillo and
Jabonero, Castillo and Lagunzad were independent contractors, whose services had been Lagunzad - were not illegally dismissed as their separation from the service was due to
terminated due to redundancy; thus, no backwages should have been awarded. It further redundancy; they had not presented any evidence that ABS-CBN abused its prerogative in
argued that the petitioners were not entitled to the CBA benefits because they never contracting out the services of drivers. Except for separation pay, the CA denied the
claimed these benefits in their position paper before the labor arbiter while the NLRC petitioners' claim for backwages, moral and exemplary damages, and attorney's fees.
failed to make a clear and positive finding that that they were part of the bargaining unit;

51
The petitioners moved for reconsideration, but the CA denied the motion in a resolution clearly indicating that they are part of the rank-and-file bargaining unit at ABS-CBN.
promulgated on July 8, 2008. [18] Hence, the present petition.
The petitioners then proceeded to describe the work they render for the company.
The Petition Collectively, they claim that they work as assistants in the production of the Cebuano
news program broadcast daily over ABS-CBN Channel 3, as follows: Fulache, Jabonero,
The petitioners challenge the CA ruling on both procedural and substantive grounds. As Castillo and Lagunzad as production assistants to drive the news team; Ponce and
procedural questions, they submit that the CA erred in: (1) affirming the NLRC resolution Almendras, to shoot scenes and events with the use of cameras owned by ABS-CBN;
which reversed its own decision; (2) sustaining the NLRC ruling that their second motion Malig-on Bigno, as studio production assistant and assistant editor/teleprompter
for reconsideration is a prohibited pleading; (3) not ruling that ABS-CBN admitted in its operator; and Cabas, Jr., as production assistant for video editing and operating the VTR
position paper before the labor arbiter that they were members of the bargaining unit as machine recorder. As production assistants, the petitioners submit that they are rank-
the matter was not raised in its appeal to the NLRC; and, (4) not ruling that and-file employees (citing in support of their position the Court's ruling in ABS-CBN
notwithstanding their failure to appeal from the first decision of the Labor Arbiter, they Broadcasting Corp. v. Nazareno[23]) who are entitled to salary increases and other benefits
can still participate in the appeal filed by ABS-CBN regarding their employment status. under the CBA. Relying on the Court's ruling in New Pacific Timber and Supply Company,
Inc. v. NLRC,[24] they posit that to exclude them from the CBA "would constitute undue
On the substantive aspect, the petitioners contend that the CA gravely erred in: (1) not discrimination and would deprive them of monetary benefits they would otherwise be
considering the evidence submitted to the NLRC on appeal to bolster their claim that they entitled to."
were members of the bargaining unit and therefore entitled to the CBA benefits; (2) not
ordering ABS-CBN to pay the petitioners' salaries, allowances and CBA benefits after the As their final point, the petitioners argue that even if they were not able to prove that
NLRC has declared that they were regular employees of ABS-CBN; (3) not ruling that they were members of the bargaining unit, the CA should not have dismissed their
under existing jurisprudence, the position of driver cannot be declared redundant, and petition. When the CA affirmed the rulings of both the labor arbiter and the NLRC that
that the petitioners-drivers were illegally dismissed; and, (4) not ruling that the they are regular employees, the CA should have ordered ABS-CBN to recognize their
petitioners were entitled to damages and attorney's fees. regular employee status and to give them the salaries, allowances and other benefits and
privileges under the CBA.
The petitioners argue that the NLRC resolution of March 24, 2006 [19] which set aside its
joint decision of December 15, 2004[20] and reinstated the twin decisions of the labor On the dismissal of Fulache, Jabonero, Castillo and Lagunzad, the petitioners impute bad
arbiter,[21] had the effect of promulgating a new decision based on issues that were not faith on ABS-CBN when it abolished the positions of drivers claiming that the company
raised in ABS-CBN's partial appeal to the NLRC. They submit that the NLRC should have failed to comply with the requisites of a valid redundancy action. They maintain that ABS-
allowed their second motion for reconsideration so that it may be able to equitably CBN did not present any evidence on the new staffing pattern as approved by the
evaluate the parties' "conflicting versions of the facts" instead of denying the motion on a management of the company, and did not even bother to show why it considered the
mere technicality. positions of drivers superfluous and unnecessary; it is not true that the positions of
drivers no longer existed because these positions were contracted out to an agency that,
On the question of their CBA coverage, the petitioners contend that the CA erred in not in turn, recruited four drivers to take the place of Fulache, Jabonero, Castillo and
considering that ABS-CBN admitted their membership in the bargaining unit, for nowhere Lagunzad. As further indication that the redundancy action against the four drivers was
in its partial appeal from the labor arbiter's decision in the regularization case did it done in bad faith, the petitioners call attention to ABS-CBN's abolition of the position of
allege that the petitioners failed to prove that they are members of the bargaining unit; drivers after the labor arbiter rendered her decision declaring Fulache, Jabonero, Castillo
instead, the company stood by its position that the petitioners were not entitled to the and Lagunzad regular company employees. The petitioners object to the dismissal of the
CBA benefits since they were independent contractors/program employees. four drivers when they refused to sign resignation letters and join Able Services, a
contracting agency, contending that the four had no reason to resign after the labor
The petitioners submit that while they did not appeal the labor arbiter's decision in the arbiter declared them regular company employees.
regularization case, ABS-CBN raised the employment status issue in its own appeal to the
NLRC; this appeal laid this issue open for review. They argue that they could still Since their dismissal was illegal and attended by bad faith, the petitioners insist that they
participate in the appeal proceedings at the NLRC; pursue their position on the issue; and should be reinstated with backwages, and should likewise be awarded moral and
introduce evidence as they did in their reply to the company's appeal. [22] They bewail the exemplary damages, and attorney's fees.
appellate court's failure to consider the evidence they presented to the NLRC (consisting
of documents and sworn statements enumerating the activities they are performing) The Case for ABS-CBN

52
 We reiterate the distinction between a question of law and a question of fact. A question
In its Comment filed on January 28, 2009, [25] ABS-CBN presents several grounds which of law exists when the doubt or controversy concerns the correct application of law or
may be synthesized as follows: jurisprudence to a certain set of facts; or when the issue does not call for an examination
of the probative value of the evidence presented, the truth or falsehood of the facts being
IV The petition raises questions of fact and not of law. admitted. A question of fact exists when a doubt or difference arises as to the truth or
V falsehood of facts or when the query invites calibration of the whole evidence considering
VI The CA committed no error in affirming the resolution of the NLRC reinstating the mainly the credibility of the witnesses, the existence and relevancy of specific
decisions of the labor arbiter. surrounding circumstances, as well as their relation to each other and to the whole, and
the probability of the situation.
ABS-CBN submits that the petition should be dismissed for having raised questions of fact
and not of law in violation of Rule 45 of the Rules of Court. It argues that the question of We also find no error in the CA's affirmation of the denial of the petitioners' second
whether the petitioners were covered by the CBA (and therefore entitled to the CBA motion for reconsideration of the March 24, 2006 resolution of the NLRC reinstating the
benefits) and whether the petitioners were illegally dismissed because of redundancy, labor arbiter's twin decisions. The petitioners' second motion for reconsideration was a
are factual questions that cannot be reviewed on certiorari because the Court is not a prohibited pleading under the NLRC rules of procedure. [28]
trier of facts.
The parties' other procedural questions directly bear on the merits of their positions and
ABS-CBN dismisses the petitioners' issues and arguments as mere rehash of what they are discussed and resolved below, together with the core substantive issues of: (1)
raised in their pleadings with the CA and as grounds that do not warrant further whether the petitioners, as regular employees, are members of the bargaining unit
consideration. It further contends that because the petitioners did not appeal the labor entitled to CBA benefits; and (2) whether petitioners Fulache, Jabonero, Castillo and
arbiter decisions, these decisions had lapsed to finality and could no longer be the subject Lagunzad were illegally dismissed.
of a petition for certiorari; the petitioners cannot obtain from the appellate court
affirmative relief other than those granted in the appealed decision. It also argues that the The Claim for CBA Benefits
NLRC did not commit any grave abuse of discretion in reinstating the twin decisions of
the labor arbiter, thereby affirming that no CBA benefits can be awarded to the We find merit in the petitioners' positions.
petitioners; in the absence of any illegal dismissal, the petitioners were not entitled to
reinstatement, backwages, damages, and attorney's fees. As regular employees, the petitioners fall within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a matter of law and contract. In the root decision
The Court's Ruling (the labor arbiter's decision of January 17, 2002) that the NLRC and CA affirmed, the
labor arbiter declared:
We first resolve the parties' procedural questions.
WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the factual
ABS-CBN wants the petition to be dismissed outright for its alleged failure to comply with scenario and the evidence adduced by both parties, it is declared that complainants in
the requirement of Rule 45 of the Rules of Court that the petition raises only questions of these cases are REGULAR EMPLOYEES of respondent ABS-CBN and not INDEPENDENT
law.[26] CONTRACTORS and thus henceforth they are entitled to the benefits and privileges
attached to regular status of their employment.
We find no impropriety in the petition from the standpoint of Rule 45. The petitioners do
not question the findings of facts of the assailed decisions. They question the This declaration unequivocally settled the petitioners' employment status: they are ABS-
misapplication of the law and jurisprudence on the facts recognized by the decisions. For CBN's regular employees entitled to the benefits and privileges of regular employees.
example, they question as contrary to law their exclusion from the CBA after they were These benefits and privileges arise from entitlements under the law (specifically, the
recognized as regular rank-and-file employees of ABS-CBN. They also question the basis Labor Code and its related laws), and from their employment contract as regular ABS-
in law of the dismissal of the four drivers and the legal propriety of the redundancy action CBN employees, part of which is the CBA if they fall within the coverage of this
taken against. To reiterate the established distinctions between questions of law and agreement. Thus, what only needs to be resolved as an issue for purposes of
questions of fact, we quote hereunder our ruling in New Rural Bank of Guimba (N.E.) Inc. implementation of the decision is whether the petitioners fall within CBA coverage.
v. Fermina S. Abad and Rafael Susan:[27]
The parties' 1999-2002 CBA provided in its Article I (Scope of the Agreement) that: [29]

53
 circumstances and with plain and unadulterated bad faith.
Section 1. APPROPRIATE BARGAINING UNIT. - The parties agree that the appropriate
bargaining unit shall be regular rank-and-file employees of ABS-CBN BROADCASTING The records show that the regularization case was in fact the root of the resulting bad
CORPORATION but shall not include: faith as this case gave rise and led to the dismissal case. First, the regularization case was
filed leading to the labor arbiter's decision [31] declaring the petitioners, including Fulache,
a) Personnel classified as Supervisor and Confidential employees; Jabonero, Castillo and Lagunzad, to be regular employees. ABS-CBN appealed the decision
and maintained its position that the petitioners were independent contractors.
b) Personnel who are on "casual" or "probationary" status as defined in Section 2 hereof;
In the course of this appeal, ABS-CBN took matters into its own hands and terminated the
c) Personnel who are on "contract" status or who are paid for specified units of work such petitioners' services, clearly disregarding its own appeal then pending with the NLRC.
as writer-producers, talent-artists, and singers. Notably, this appeal posited that the petitioners were not employees (whose services
therefore could be terminated through dismissal under the Labor Code); they were
The inclusion or exclusion of new job classifications into the bargaining unit shall be independent contractors whose services could be terminated at will, subject only to the
subject of discussion between the COMPANY and the UNION. [emphasis supplied] terms of their contracts. To justify the termination of service, the company cited
redundancy as its authorized cause but offered no justificatory supporting evidence. It
Under these terms, the petitioners are members of the appropriate bargaining unit merely claimed that it was contracting out the petitioners' activities in the exercise of its
because they are regular rank-and-file employees and do not belong to any of the management prerogative.
excluded categories. Specifically, nothing in the records shows that they are supervisory
or confidential employees; neither are they casual nor probationary employees. Most ABS-CBN's intent, of course, based on the records, was to transfer the petitioners and
importantly, the labor arbiter's decision of January 17, 2002 - affirmed all the way up to their activities to a service contractor without paying any attention to the requirements
the CA level - ruled against ABS-CBN's submission that they are independent contractors. of our labor laws; hence, ABS-CBN dismissed the petitioners when they refused to sign up
Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBA's with the service contractor.[32] In this manner, ABS-CBN fell into a downward spiral of
express terms and are entitled to its benefits. irreconcilable legal positions, all undertaken in the hope of saving itself from the decision
declaring its "talents" to be regular employees.
We see no merit in ABS-CBN's arguments that the petitioners are not entitled to CBA
benefits because: (1) they did not claim these benefits in their position paper; (2) the By doing all these, ABS-CBN forgot labor law and its realities.
NLRC did not categorically rule that the petitioners were members of the bargaining unit;
and (3) there was no evidence of this membership. To further clarify what we stated It forgot that by claiming redundancy as authorized cause for dismissal, it impliedly
above, CBA coverage is not only a question of fact, but of law and contract. The factual admitted that the petitioners were regular employees whose services, by law, can only be
issue is whether the petitioners are regular rank-and-file employees of ABS-CBN. The terminated for the just and authorized causes defined under the Labor Code.
tribunals below uniformly answered this question in the affirmative. From this factual
finding flows legal effects touching on the terms and conditions of the petitioners' regular Likewise ABS-CBN forgot that it had an existing CBA with a union, which agreement must
employment. This was what the labor arbiter meant when he stated in his decision that be respected in any move affecting the security of tenure of affected employees;
"henceforth they are entitled to the benefits and privileges attached to regular status of otherwise, it ran the risk of committing unfair labor practice - both a criminal and an
their employment." Significantly, ABS-CBN itself posited before this Court that "the Court administrative offense.[33] It similarly forgot that an exercise of management prerogative
of Appeals did not gravely err nor gravely abuse its discretion when it affirmed the can be valid only if it is undertaken in good faith and with no intent to defeat or
resolution of the NLRC dated March 24, 2006 reinstating and adopting in toto the decision circumvent the rights of its employees under the laws or under valid agreements. [34]
of the Labor Arbiter dated January 17, 2002 x x x."[30] This representation alone fully
resolves all the objections - procedural or otherwise - ABS-CBN raised on the Lastly, it forgot that there was a standing labor arbiter's decision that, while not yet final
regularization issue. because of its own pending appeal, cannot simply be disregarded. By implementing the
dismissal action at the time the labor arbiter's ruling was under review, the company
The Dismissal of Fulache, Jabonero, unilaterally negated the effects of the labor arbiter's ruling while at the same time
Castillo and Lagunzad appealling the same ruling to the NLRC. This unilateral move is a direct affront to the
NLRC's authority and an abuse of the appeal process.
The termination of employment of the four drivers occurred under highly questionable

54
All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can
draw to characterize this bad faith is the prohibition against forum-shopping under the The injustice committed on the petitioners/drivers requires rectification. Their dismissal
Rules of Court. In forum-shopping, the Rules characterize as bad faith the act of filing was not only unjust and in bad faith as the above discussions abundantly show. The bad
similar and repetitive actions for the same cause with the intent of somehow finding a faith in ABS-CBN's move toward its illegitimate goal was not even hidden; it dismissed
favorable ruling in one of the actions filed.[35] ABS-CBN's actions in the two cases, as the petitioners - already recognized as regular employees - for refusing to sign up with its
described above, are of the same character, since its obvious intent was to defeat and service contractor. Thus, from every perspective, the petitioners were illegally dismissed.
render useless, in a roundabout way and other than through the appeal it had taken, the
labor arbiter's decision in the regularization case. Forum-shopping is penalized by the By law,[39] illegally dismissed employees are entitled to reinstatement without loss of
dismissal of the actions involved. The penalty against ABS-CBN for its bad faith in the seniority rights and other privileges and to full backwages, inclusive of allowances, and to
present case should be no less. other benefits or their monetary equivalent from the time their compensation was
withheld from them up to the time of their actual reinstatement. The four dismissed
The errors and omissions do not belong to ABS-CBN alone. The labor arbiter himself who drivers deserve no less.
handled both cases did not see the totality of the company's actions for what they were.
He appeared to have blindly allowed what he granted the petitioners with his left hand, to Moreover, they are also entitled to moral damages since their dismissal was attended by
be taken away with his right hand, unmindful that the company already exhibited a badge bad faith.[40] For having been compelled to litigate and to incur expenses to protect their
of bad faith in seeking to terminate the services of the petitioners whose regular status rights and interest, the petitioners are likewise entitled to attorney's fees. [41]
had just been recognized. He should have recognized the bad faith from the timing alone
of ABS-CBN's conscious and purposeful moves to secure the ultimate aim of avoiding the WHEREFORE, premises considered, we hereby GRANT the petition. The decision dated
regularization of its so-called "talents." March 25, 2008 and the resolution dated July 8, 2008 of the Court of Appeals in CA-G.R.
SP No. 01838 are hereby REVERSED and SET ASIDE. Accordingly, judgment is hereby
The NLRC, for its part, initially recognized the presence of bad faith when it originally rendered as follows:
ruled that:
1. Confirming that petitioners FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO,
While notice has been made to the employees whose positions were declared redundant, JEFFREY LAGUNZAD, MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY
the element of good faith in abolishing the positions of the complainants appear to be PONCE and ALAN C. ALMENDRAS are regular employees of ABS-CBN BROADCASTING
wanting. In fact, it remains undisputed that herein complainants were terminated when CORPORATION, and declaring them entitled to all the rights, benefits and privileges,
they refused to sign an employment contract with Able Services which would make them including CBA benefits, from the time they became regular employees in accordance with
appear as employees of the agency and not of ABS-CBN. Such act by itself clearly existing company practice and the Labor Code;
demonstrates bad faith on the part of the respondent in carrying out the company's
redundancy program x x x.[36] 2. Declaring illegal the dismissal of Fulache, Jabonero, Castillo and Lagunzad, and
ordering ABS-CBN to immediately reinstate them to their former positions without loss
On motion for reconsideration by both parties, the NLRC reiterated its "pronouncement of seniority rights with full backwages and all other monetary benefits, from the time
that complainants were illegally terminated as extensively discussed in our Joint Decision they were dismissed up to the date of their actual reinstatement;
dated December 15, 2004."[37] Yet, in an inexplicable turnaround, it reconsidered its joint
decision and reinstated not only the labor arbiter's decision of January 17, 2002 in the 3. Awarding moral damages of P100,000.00 each to Fulache, Jabonero, Castillo and
regularization case, but also his illegal dismissal decision of April 21, 2003. [38] Thus, the Lagunzad; and,
NLRC joined the labor arbiter in his error that we cannot but characterize as grave abuse
of discretion. 4. Awarding attorney's fees of 10% of the total monetary award decreed in this Decision.

The Court cannot leave unchecked the labor tribunals' patent grave abuse of discretion Costs against the respondent.
that resulted, without doubt, in a grave injustice to the petitioners who were claiming
regular employment status and were unceremoniously deprived of their employment SO ORDERED.
soon after their regular status was recognized. Unfortunately, the CA failed to detect the
labor tribunals' gross errors in the disposition of the dismissal issue. Thus, the CA itself Carpio, (Chairperson), Del Castillo, Abad, and Perez, JJ., concur.
joined the same errors the labor tribunals committed.

55
 SECOND DIVISION
G.R. No. 170351, March 30, 2011
LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP,
PETITIONER, VS. PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT
CORPORATION, RESPONDENT.

DECISION
NACHURA, J.:

Under review is the Decision[1] dated June 30, 2005 of the Court of Appeals (CA) in CA-
G.R. SP No. 65760, which dismissed the petition for certiorari filed by petitioner Leyte
Geothermal Power Progressive Employees Union - ALU?TUCP (petitioner Union) to annul
and set aside the decision[2] dated December 10, 1999 of the National Labor Relations
Commission (NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development Corporation

[PNOC-EDC] is a government-owned and controlled corporation engaged in exploration,
development, utilization, generation and distribution of energy resources like geothermal
energy.

Petitioner is a legitimate labor organization, duly registered with the Department of

Labor and Employment (DOLE) Regional Office No. VIII, Tacloban City.

Among [respondent's] geothermal projects is the Leyte Geothermal Power Project

located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is
composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal
Production Field Project (LGPF) which provide the power and electricity needed not only
in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in
the island of Luzon as well. Thus, the [respondent] hired and employed hundreds of
employees on a contractual basis, whereby, their employment was only good up to the
completion or termination of the project and would automatically expire upon the
completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects
had become members of petitioner. In view of that circumstance, the petitioner demands
from the [respondent] for recognition of it as the collective bargaining agent of said
employees and for a CBA negotiation with it. However, the [respondent] did not heed
such demands of the petitioner. Sometime in 1998 when the project was about to be
completed, the [respondent] proceeded to serve Notices of Termination of Employment
upon the employees who are members of the petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the
[respondent] on the ground of purported commission by the latter of unfair labor

56
practice for "refusal to bargain collectively, union busting and mass termination." On the Dismissing both parties' claims against each other for violation of the
same day, the petitioner declared a strike and staged such strike. Assumption Order dated January 4, 1999 for lack of factual basis[;]

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened Dismissing all other claims for lack of merit.[4]
and issued the Order, dated January 4, 1999, certifying the labor dispute to the NLRC for
compulsory arbitration. Accordingly, all the striking workers were directed to return to Petitioner Union filed a motion for reconsideration of the NLRC decision, which was
work within twelve (12) hours from receipt of the Order and for the [respondent] to subsequently denied. Posthaste, petitioner Union filed a petition for certiorari before the
accept them back under the same terms and conditions of employment prior to the strike. CA, alleging grave abuse of discretion in the decision of the NLRC. As previously adverted
Further, the parties were directed to cease and desist from committing any act that would to, the CA dismissed the petition for certiorari, thus:
exacerbate the situation.
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
However, despite earnest efforts on the part of the Secretary of Labor and Employment to DISMISSING the Petition. The assailed Decision dated December 10, 1999 of the NLRC 4 th
settle the dispute amicably, the petitioner remained adamant and unreasonable in its Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case
position, causing the failure of the negotiation towards a peaceful compromise. In effect, No. VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED.
the petitioner did not abide by [the] assumption order issued by the Secretary of Labor.
Costs against the Petitioner. [5]
Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike
Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Hence, this appeal by certiorari filed by petitioner Union, positing the following questions
Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner's of law:
Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were later
on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case 1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS"
was docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB THAT ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES' THEIR RIGHT TO
Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC 4 th Division in SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT
Cebu City on June 21, 1999 for the proper disposition thereof. [3] EMPLOYEES?

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit: 2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES' CONTRACT, SUCH THAT THE
SO-CALLED UNDERTAKING WAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY
WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows: TREATED AS PROJECT EMPLOYEES?

Declaring the officers and members of [petitioner] Union as project employees; 3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM'S OWN ESTIMATE OF
JOB COMPLETION, PROVING THAT THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK
Declaring the termination of their employment by reason of the completion of TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR
the project, or a phase or portion thereof, to which they were assigned, as valid COMPLETION [OF] THE "PROJECT?"
and legal;
4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO
Declaring the strike staged and conducted by [petitioner] Union through its DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED AMONG THEMSELVES A
officers and members on December 28, 1998 to January 6, 1999 as illegal for LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?
failure to comply with the mandatory requirements of the law on strike[;]
5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE
Declaring all the officers and members of the board of [petitioner] Union who CONSIDERED AS A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION UNDER
instigated and spearheaded the illegal strike to have lost their employment[;] ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?

Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor 6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE
practice for lack of merit[;] UNION, IS THIS UNION BUSTING?[6]

57
Stripped of rhetoric, the issues for our resolution are: employees or those who are not regular, project, or seasonal employees. Jurisprudence
has added a fifth kind-- a fixed-term employee. [9]
Whether the officers and members of petitioner Union are project employees
of respondent; and Article 280 of the Labor Code, as worded, establishes that the nature of the employment
is determined by law, regardless of any contract expressing otherwise. The supremacy of
Whether the officers and members of petitioner Union engaged in an illegal the law over the nomenclature of the contract and the stipulations contained therein is to
strike. bring to life the policy enshrined in the Constitution to "afford full protection to labor." [10]
Thus, labor contracts are placed on a higher plane than ordinary contracts; these are
On the first issue, petitioner Union contends that its officers and members performed imbued with public interest and therefore subject to the police power of the State. [11]
activities that were usually necessary and desirable to respondent's usual business. In
fact, petitioner Union reiterates that its officers and members were assigned to the However, notwithstanding the foregoing iterations, project employment contracts which
Construction Department of respondent as carpenters and masons, and to other jobs fix the employment for a specific project or undertaking remain valid under the law:
pursuant to civil works, which are usually necessary and desirable to the department.
Petitioner Union likewise points out that there was no interval in the employment x x x By entering into such a contract, an employee is deemed to understand that his
contract of its officers and members, who were all employees of respondent, which lack employment is coterminous with the project. He may not expect to be employed
of interval, for petitioner Union, "manifests that the `undertaking' is usually necessary continuously beyond the completion of the project. It is of judicial notice that project
and desirable to the usual trade or business of the employer." employees engaged for manual services or those for special skills like those of carpenters
or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for
We cannot subscribe to the view taken by petitioner Union. bestowing special treatment on them or for invalidating a contract of employment.
Project employment contracts are not lopsided agreements in favor of only one party
The distinction between a regular and a project employment is provided in Article 280, thereto. The employer's interest is equally important as that of the employee[s'] for theirs
paragraph 1, of the Labor Code: is the interest that propels economic activity. While it may be true that it is the employer
who drafts project employment contracts with its business interest as overriding
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the consideration, such contracts do not, of necessity, prejudice the employee. Neither is the
contrary notwithstanding and regardless of the oral agreement of the parties, an employee left helpless by a prejudicial employment contract. After all, under the law, the
employment shall be deemed to be regular where the employee has been engaged to interest of the worker is paramount.[12]
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project In the case at bar, the records reveal that the officers and the members of petitioner
or undertaking the completion or termination of which has been determined at the Union signed employment contracts indicating the specific project or phase of work for
time of the engagement of the employee or where the work or service to be performed which they were hired, with a fixed period of employment. The NLRC correctly disposed
is seasonal in nature and the employment is for the duration of the season. of this issue:

An employment shall be deemed to be casual if it is not covered by the preceding A deeper examination also shows that [the individual members of petitioner Union]
paragraph:  Provided, That, any employee who has rendered at least one year of service, indeed signed and accepted the [employment contracts] freely and voluntarily. No
whether such service is continuous or broken, shall be considered a regular employee evidence was presented by [petitioner] Union to prove improper pressure or undue
with respect to the activity in which he is employed and his employment shall continue influence when they entered, perfected and consummated [the employment] contracts. In
while such actually exists. [7] fact, it was clearly established in the course of the trial of this case, as explained by no less
than the President of [petitioner] Union, that the contracts of employment were read,
The foregoing contemplates four (4) kinds of employees: (a) regular employees or those comprehended, and voluntarily accepted by them. x x x.
who have been "engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer"; (b) project employees or those "whose xxxx
employment has been fixed for a specific project or undertaking[,] the completion or
termination of which has been determined at the time of the engagement of the As clearly shown by [petitioner] Union's own admission, both parties had executed the
employee";  (c) seasonal employees or those who work or perform services which are contracts freely and voluntarily without force, duress or acts tending to vitiate the
seasonal in nature, and the employment is for the duration of the season; [8] and (d) casual worker[s'] consent. Thus, we see no reason not to honor and give effect to the terms and

58
conditions stipulated therein. x x x.[13] In the realm of business and industry, we note that "project" could refer to one or the
other of at least two (2) distinguishable types of activities. Firstly, a project could refer to
Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are a particular job or undertaking that is within the regular or usual business of the employer
supported by substantial evidence. company, but which is distinct and separate, and identifiable as such, from the other
undertakings of the company. Such job or undertaking begins and ends at determined or
It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial determinable times. The typical example of this first type of project is a particular
bodies, which are deemed to have acquired expertise in matters within their respective construction job or project of a construction company. A construction company ordinarily
jurisdictions, are generally accorded not only respect but even finality, and bind the Court carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-
when supported by substantial evidence.[14] Rule 133, Section 5 defines substantial storey hotel in Makati; a residential condominium building in Baguio City; and a domestic
evidence as "that amount of relevant evidence which a reasonable mind might accept as air terminal in Iloilo City. Employees who are hired for the carrying out of one of these
adequate to justify a conclusion." separate projects, the scope and duration of which has been determined and made known
to the employees at the time of employment, are properly treated as "project employees,"
Consistent therewith is the doctrine that this Court is not a trier of facts, and this is and their services may be lawfully terminated at completion of the project.
strictly adhered to in labor cases. [15] We may take cognizance of and resolve factual issues, The term "project" could also refer to, secondly, a particular job or undertaking that is not
only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are within the regular business of the corporation. Such a job or undertaking must also be
inconsistent with those of the CA.[16] identifiably separate and distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined or determinable
In the case at bar, both the NLRC and the CA were one in the conclusion that the officers times.[18]
and the members of petitioner Union were project employees. Nonetheless, petitioner
Union insists that they were regular employees since they performed work which was Plainly, the litmus test to determine whether an individual is a project employee lies in
usually necessary or desirable to the usual business or trade of the Construction setting a fixed period of employment involving a specific undertaking which completion
Department of respondent. or termination has been determined at the time of the particular employee's engagement.

The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of project In this case, as previously adverted to, the officers and the members of petitioner Union
employees: were specifically hired as project employees for respondent's Leyte Geothermal Power
Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently,
It is evidently important to become clear about the meaning and scope of the term upon the completion of the project or substantial phase thereof, the officers and the
"project" in the present context. The "project" for the carrying out of which "project members of petitioner Union could be validly terminated.
employees" are hired would ordinarily have some relationship to the usual business of
the employer. Exceptionally, the "project" undertaking might not have an ordinary or Petitioner Union is adamant, however, that the lack of interval in the employment 
normal relationship to the usual business of the employer. In this latter case, the contracts  of  its officer and members negates the latter's status
determination of the scope and parameters of the "project" becomes fairly easy. x x x.
From the viewpoint, however, of the legal characterization problem here presented to the as mere project employees. For petitioner Union, the lack of interval further drives home
Court, there should be no difficulty in designating the employees who are retained or its point that its officers and members are regular employees who performed work which
hired for the purpose of undertaking fish culture or the production of vegetables as was usually necessary or desirable to the usual business or trade of respondent.
"project employees," as distinguished from ordinary or "regular employees," so long as
the duration and scope of the project were determined or specified at the time of We are not persuaded.
engagement of the "project employees." For, as is evident from the provisions of
Article 280 of the Labor Code, quoted earlier, the principal test for determining Petitioner Union's members' employment for more than a year does equate to their
whether particular employees are properly characterized as "project employees" regular employment with respondent. In this regard, Mercado, Sr. v. NLRC[19] illuminates:
as distinguished from "regular employees," is whether or not the "project
employees" were assigned to carry out a "specific project or undertaking," the The first paragraph [of Article 280 of the Labor Code] answers the question of who are
duration (and scope) of which were specified at the time the employees were regular employees. It states that, regardless of any written or oral agreement to the
engaged for that project. contrary, an employee is deemed regular where he is engaged in necessary or desirable
activities in the usual business or trade of the employer, except for project employees.

59
 project employees, its claim of union busting is likewise dismissed.
A project employee has been defined to be one whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has been On the second issue, petitioner Union contends that there was no stoppage of work;
determined at the time of the engagement of the employee, or where the work or service hence, they did not strike. Euphemistically, petitioner Union avers that it "only engaged in
to be performed is seasonal in nature and the employment is for the duration of the picketing,"[20] and maintains that "without any work stoppage, [its officers and members]
season, as in the present case. only engaged in xxx protest activity."

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees We are not convinced.  Petitioner Union splits hairs.
who do not fall under the definition of the preceding paragraph. The proviso, in said
second paragraph, deems as regular employees those "casual" employees who have To begin with, quite evident from the records is the undisputed fact that petitioner Union
rendered at least one year of service regardless of the fact that such service may be filed a Notice of Strike on December 28, 1998 with the Department of Labor and
continuous or broken. Employment, grounded on respondent's purported unfair labor practices, i.e., "refusal to
bargain collectively, union busting and mass termination." On even date, petitioner Union
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is declared and staged a strike.
applicable to their case and that the Labor Arbiter should have considered them regular
by virtue of said proviso. The contention is without merit. Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a
Return-to-Work Order[21] dated January 4, 1999, certifying the labor dispute to the NLRC
The general rule is that the office of a proviso is to qualify or modify only the phrase for compulsory arbitration. The Order narrates the facts leading to the labor dispute, to
immediately preceding it or restrain or limit the generality of the clause that it wit:
immediately follows. Thus, it has been held that a proviso is to be construed with
reference to the immediately preceding part of the provision to which it is attached, and On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent]
not to the statute itself or to other sections thereof. The only exception to this rule is citing unfair labor practices, specifically: refusal to bargain collectively, union busting and
where the clear legislative intent is to restrain or qualify not only the phrase immediately mass termination as the grounds [therefor].  On the same day, [petitioner] Union went on
preceding it (the proviso) but also earlier provisions of the statute or even the statute strike and took control over [respondent's] facilities of its Leyte Geothermal Project.
itself as a whole.
Attempts by the National Conciliation and Mediation Board -RBVIII to forge a mutually
Policy Instruction No. 12 of the Department of Labor and Employment discloses that the acceptable solution proved futile.
concept of regular and casual employees was designed to put an end to casual
employment in regular jobs, which has been abused by many employers to prevent so - In the meantime, the strike continues with no settlement in sight placing in jeopardy the
called casuals from enjoying the benefits of regular employees or to prevent casuals from supply of much needed power supply in the Luzon and Visayas grids.
joining unions. The same instructions show that the proviso in the second paragraph of
Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land xxxx
owners to further the interests of laborers, whether agricultural or industrial. What it
seeks to eliminate are abuses of employers against their employees and not, as The on-going strike threatens the availability of continuous electricity to these areas
petitioners would have us believe, to prevent small-scale businesses from engaging in which is critical to day-to-day life, industry, commerce and trade. Without doubt,
legitimate methods to realize profit. Hence, the proviso is applicable only to the [respondent's] operations [are] indispensable to the national interest and falls (sic)
employees who are deemed "casuals" but not to the "project" employees nor the regular within the purview of Article 263 (g) of the Labor Code, as amended, which warrants (sic)
employees treated in paragraph one of Art. 280. the intervention of this Office.

Clearly, therefore, petitioners being project employees, or, to use the correct term, Third, petitioner Union itself, in its pleadings, used the word "strike."
seasonal employees, their employment legally ends upon completion of the project or the
[end of the] season. The termination of their employment cannot and should not Ultimately, petitioner Union's asseverations are belied by the factual findings of the
constitute an illegal dismissal. NLRC, as affirmed by the CA:

Considering our holding that the officers and the members of petitioner Union were The failure to comply with the mandatory requisites for the conduct of strike is both

60
admitted and clearly shown on record. Hence, it is undisputed that no strike vote was notice, the labor union may strike or the employer may declare a lockout.
conducted; likewise, the cooling-off period was not observed and that the 7-day strike
ban after the submission of the strike vote was not complied with since there was no (f) A decision to declare a strike must be approved by a majority of the total union
strike vote taken. membership in the bargaining unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose. A decision to declare a lockout must be approved by a
xxxx majority of the board of directors of the corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting called for that purpose. The decision
The factual issue of whether a notice of strike was timely filed by [petitioner] Union was shall be valid for the duration of the dispute based on substantially the same grounds
resolved by the evidence on record. The evidence revealed that [petitioner] Union struck considered when the strike or lockout vote was taken. The Department may, at its own
even before it could file the required notice of strike. Once again, this relied on initiative or upon the request of any affected party, supervise the conduct of the secret
[petitioner] Union's proof. [Petitioner] Union['s] witness said: balloting. In every case, the union or the employer shall furnish the Department the
results of the voting at least seven days before the intended strike or lockout, subject to
Atty. Sinsuat: You stated that you struck on 28 December 1998 is that correct? the cooling-off period herein provided.

Witness : Early in the morning of December 1998. In fine, petitioner Union's bare contention that it did not hold a strike cannot trump the
factual findings of the NLRC that petitioner Union indeed struck against respondent. In
xxxx fact, and more importantly, petitioner Union failed to comply with the requirements set
by law prior to holding a strike.
Atty. Sinsuat: And you went there to conduct the strike did you not?
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP
Witness : Our plan then was to strike at noon of December 28 and the strikers will be No. 65760 is AFFIRMED. Costs against petitioner Union.
positioned at their respective areas.[22]
SO ORDERED.
Article 263 of the Labor Code enumerates the requisites for holding a strike:
Carpio, (Chairperson), Peralta, Abad, and Mendoza, JJ., concur.
Art. 263. Strikes, picketing, and lockouts. - (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent
may file a notice of strike or the employer may file a notice of lockout with the
Department at least 30 days before the intended date thereof. In cases of unfair labor
practice, the period of notice shall be 15 days and in the absence of a duly certified
bargaining agent, the notice of strike may be filed by any legitimate labor organization in
behalf of its members. However, in case of dismissal from employment of union officers
duly elected in accordance with the union constitution and by-laws, which may constitute
union busting, where the existence of the union is threatened, the 15-day cooling-off
period shall not apply and the union may take action immediately.

(d)  The notice must be in accordance with such implementing rules and regulations as
the Department of Labor and Employment may promulgate.

(e)During the cooling-off period, it shall be the duty of the Department to exert all efforts
at mediation and conciliation to effect a voluntary settlement. Should the dispute remain
unsettled until the lapse of the requisite number of days from the mandatory filing of the

61
 a. underpayment of salary:
SPECIAL EN BANC From 2/22/11- 4/30/11
G.R. No. 214183, February 20, 2017
E. GANZON, INC. (EGI)AND EULALIO GANZON, PETITIONERS, VS. FORTUNATO B.
ANDO, JR., RESPONDENT. b. Holiday pay:
From 1/21/10 - 4/30/11
DECISION
PERALTA, J.:
c. Service incentive leave pay:
This petition for review on certiorari under Rule 45 of the Rules of Civil Procedure (Rules) From 1/21/10 - 4/30/11
seeks to reverse the February 28, 2014 Decision [1] and September 4, 2014 Resolution [2]  of
the Court of Appeals (CA) in CA G.R. SP No. 126624, which annulled the Resolutions dated
May 25, 2012[3]  and July 17, 2012[4]  of the National Labor Relations Commission (NLRC) d. Proportionate 13th month pay
which affirmed in toto the December 29, 2011 Decision[5]  of the Labor Arbiter.   From 1/1/11 - 4/30/11

On May 16, 2011, respondent Fortunato B. Ando, Jr. (Ando) filed a complaint [6]  against The computation of the Computation and Examination Unit of this Office is made part of
petitioner E. Ganzon, Inc. (EGI) and its President, Eulalio Ganzon, for illegal dismissal and this Decision.
money claims for: underpayment of salary, overtime pay, and 13th month pay; non-
payment of holiday pay and service incentive leave; illegal deduction; and attorneys fees. SO ORDERED.[10]
He alleged that he was a regular employee working as a finishing carpenter in the
construction business of EGI; he was repeatedly hired from January 21, 2010 until April Both parties elevated the case to the NLRC,[11]  which dismissed the appeals filed and
30, 2011 when he was terminated without prior notice and hearing; his daily salary of  affirmed in toto the Decision of the Labor Arbiter. Ando filed a motion for
292.00 was below the amount required  by law; and wage deductions were made without reconsideration,[12]  but it was denied. Still aggrieved, he filed a Rule 65 petition before the
his consent, such as rent for the barracks located in the job site and payment for CA,[13]  which granted the same. The fallo of the Decision ordered:
insurance premium.
WHEREFORE, finding the petition to be impressed with merit, the same is hereby
EGI countered that, as proven by the three (3) project employment contract, Ando was GRANTED. The assailed NLRC resolutions dated May 25, 2012 and July 17, 2012, are
engaged as a project worker (Formworker-2) in Bahay Pamulinawen Project in Laoag, hereby ANNULLED insofar as the matter of illegal dismissal is concerned and a new
Ilocos Norte from June 1, 2010 to September 30,2010 [7]  and from January 3, 2011 to judgment is hereby ENTERED declaring petitioner Fortunato Ando, Jr. illegally dismissed
February 28,2011[8]  as well as in EGI West Insula Project in Quezon City, Metro Manila from work. Private respondent E. Ganzon, Inc. (EGI) is hereby ORDERED to pay
from February 22, 2011 to March 31, 2011; [9] he was paid the correct salary based on the petitioner Ando, Jr. his full backwages inclusive of his allowances and other benefits
Wage Order applicable in the region; he already received the 13th month pay for 2010 computed from April 30, 2011 (the date of his dismissal) until finality of this decision. EGI
but the claim for 2011 was not yet processed at the time the complaint was filed; and he is further ordered to pay petitioner Ando, Jr. separation pay equivalent to one month
voluntarily agreed to pay 500.00 monthly for the cost of the barracks, beds, water, salary.
electricity, and other expenses of his stay at the job site.
The award of petitioner Ando, Jr.'s money claims granted by the Labor Arbiter and
The Labor Arbiter declared Ando a project employee of EGI but granted some of his affirmed by the NLRC is SUSTAINED.
money claims. The dispositive portion of the Decision reads:
SO ORDERED.[14]
WHEREFORE, premises considered, judgment is hereby rendered Dismissing the
complaint for illegal dismissal for lack of merit. EGI's motion for reconsideration[15]  was denied; hence, this case. The petition is
meritorious.
However,  respondents are ordered to pay jointly and severally complainant Fortunato
Ando, Jr. In labor cases, Our power of review is limited to the determination of whether the CA
correctly resolved the presence or absence of grave abuse of discretion on the part of the

62
NLRC. The Court explained this in Montoya v. Transmed Manila Corporation:[16]
The activities of project employees may or may not be usually necessary or desirable in
x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in the usual business or trade of the employer. In ALU-TUCP v. National Labor Relations
contrast with the review for jurisdictional error that we undertake under Rule 65. Commission,[27]  two (2) categories of project employees were distinguished:
Furthermore, Rule 45 limits us to the review of questions of law raised against the In the realm of business and industry, we note that "project" could refer to one or the
assailed CA decision. In ruling for legal correctness, we have to view the CA decision in other of at least two (2) distinguishable types of activities. Firstly, a project could refer to
the same context that the petition for certiorari it ruled upon was presented to it; we a particular job or undertaking that is within the regular or usual business of the
have to examine  the CA decision from  the prism  of whether  it correctly  employer company, but which is distinct and separate, and identifiable as such, from the
determined the presence or absence  of grave abuse of discretion in the NLRC other undertakings of the company. Such job or undertaking begins and ends at
decision before it, not on the basis of whether the NLRC decision on the merits of determined or determinable times. The typical example of this first type of project  is a
the case was correct. In other words, we have to be keenly aware that the CA undertook particular  construction  job or project  of a construction company. x x x. Employees who
a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it This is are hired for the carrying out of one of these separate  projects,  the scope  and duration 
the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In of  which  has been determined and made known to the employees at the time of
question form, the question to ask is: Did the CA correctly determine whether the employment, are properly treated as "project employees," and their services may be
NLRC committed grave abuse of discretion in ruling on the case?[17] lawfully terminated at completion of the project.
Errors of judgment are not within the province of a special civil action for certiorari
under Rule 65, which  is merely  confined  to issues of jurisdiction  or grave  abuse of The term "project" could also refer to, secondly, a particular job or undertaking that is not
discretion.[18] Grave  abuse of discretion connotes judgment exercised in a capricious and within the regular business of the corporation. Such a job or undertaking must also be
whimsical manner that is tantamount to lack of jurisdiction. [19]  To be considered "grave," identifiably separate and distinct from the ordinary or regular business operations of the
discretion must be exercised in a despotic manner by reason of passion or personal employer. The job or undertaking also begins and ends at determined or determinable
hostility, and must be so patent and gross as to amount to an evasion of positive duty or times. x x x[28]
to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law. As the assigned project or phase begins and ends at determined or determinable
[20] 
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when its times, the services of the project employee may be lawfully terminated at its completion.
[29]
findings and conclusions reached are not supported by substantial evidence or are in
total disregard of evidence material to or even decisive of the controversy; when it is In this case, the three project employment contracts signed by Ando explicitly stipulated
necessary to prevent a substantial wrong or to do substantial justice; when the findings of the agreement "to engage [his] services as a Project Worker" [30]  and that:
the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the 5. [His] services with the Project will end upon completion of the phase of work for which
case.[21] [he was] hired for and is tentatively set on (written date). However, this could be
extended or shortened depending on the work phasing.[31]
In the case at bar, We hold that the CA erred in ruling that the NLRC gravely abused its The CA opined that Ando's contracts do not bear the essential element of a project
discretion when it sustained the Labor Arbiter's finding that Ando is not a regular employment because while his contracts stated the period by which he was engaged, his
employee but a project employee of EGI. tenure remained indefinite. The appellate court ruled that the stipulation that his services
"could be extended or shortened depending on the work phasing" runs counter to the
The terms regular, project, seasonal and casual employment are taken from Article very essence of project employment since the certainty of the completion or termination
280[22]  of the Labor Code, as amended. In addition, Brent School, Inc. v. Zamora[23] ruled of the projects is in question. It was noted that, based on Ando's payslips, his services
that fixed-term employment contract is not per se illegal or against public policy? [24]  were still engaged by EGI even after his contracts expired. These extensions as well as his
Under Art. 280, project employment is one which "has been fixed for a specific project or repeated rehiring manifested that the work he rendered are necessary and desirable to
undertaking the completion or termination of which has been determined at the time of EGI's construction business, thereby removing him from the scope of project employment
the engagement  of the employee." To be considered  as project-based, the employer has contemplated under Article 280.
the burden of proof to show that: (a) the employee was assigned to carry out a specific
project or undertaking and (b) the duration and scope of which were specified at the time We do not agree.
the employee was engaged for such  project  or  undertaking.[25]  It must be  proved  that
the  particular work/service to be performed as well as its duration are defined in the Records show that Ando's contracts for Bahay Pamulinawen Project were extended until
employment agreement and made clear to the employee who was informed thereof at the December 31, 2010[32]  (from the original stated date of September 30, 2010) and
time of hiring.[26] shortened to February 15,2011 [33]  (from the original stated date of February 28, 2011)

63
while his services in West Insula Project was extended until April 30, 2011 [34]  (from the permanent employees and pay them wages even if there are no projects for them to work
original stated date of March 31, 2011). These notwithstanding, he is still considered as a on. [39]
project, not regular, employee of EGI.
Project employment should not be confused and interchanged with fixed-term
A project employment contract is valid under the law. employment:
x x x By entering into such a contract, an employee is deemed to understand that his
employment is coterminous with the project. He may not expect to be employed x x x While the former requires a project as restrictively defined above, the duration of a
continuously beyond the completion of the project. It is of judicial notice that project fixed-term employment agreed upon by the parties may be any day certain. which is
employees engaged for manual services or those for special skills like those of carpenters understood to be "that which must necessarily come although it may not be known
or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for when." The decisive determinant  in  fixed-term  employment  is not  the  activity  that 
bestowing special treatment on them or for invalidating a contract of employment. the employee is called upon to perform but the day certain agreed upon by the parties 
Project employment contracts are not lopsided agreements in favor of only one party for  the  commencement  and  termination  of  the employment relationship. [40]
thereto. The employer's interest is equally important as that of the employee's for theirs
is the interest that propels economic activity. While it may be true that it is the employer The decisive determinant in project employment is the activity that the employee is
who drafts project employment contracts with its business interest as overriding called upon to perform and not the day certain agreed upon by the parties for the
consideration, such contracts do not, of necessity, prejudice the employee. Neither is the commencement and termination of the employment relationship. Indeed, in Filsystems,
employee left helpless by a prejudicial employment contract. After all, under the law, the Inc. v. Puente,[41]  We even ruled that an employment contract that does not mention
interest of the worker is paramount.[35] particular dates that establish the specific duration of the project does not preclude one's
classification as a project employee.
The Court has upheld the validity of a project-based contract of employment provided
that the period was agreed upon knowingly and voluntarily by the parties, without any In this case, the duration of the specific/identified  undertaking for which Ando was
force, duress or improper pressure being brought to bear upon the employee and absent engaged was reasonably determinable. Although the employment contract provided that
any other circumstances vitiating his consent; or where it satisfactorily appears that the the stated date may be "extended or shortened depending on the work phasing," it
employer and employee dealt with each other on more or less equal terms with no moral specified the termination of the parties' employment relationship on a "day certain,"
dominance whatever being exercised by the former over the latter; and it is apparent which is "upon completion of the phase of work for which [he was] hired for." [42]
from the circumstances that the period was not imposed to preclude the acquisition of A "day" x x x is understood to be that which must necessarily come, although is may not
tenurial security by the employee. [36] be known exactly when. This means that where the final completion of a project or phase
Otherwise, such contract should be struck down as contrary to public policy, morals, good thereof is in fact determinable and the expected completion is made known to the
custom or public order.[37] employee, such project employee may not be considered regular, notwithstanding the
one-year duration of employment in the project or phase thereof or the one-year
Here, Ando was adequately notified of his employment status at the time his services duration of two or more employments in the same project or phase of the project.
were engaged by EGI for the Bahay Pamulinawen and the West Insula Projects. The
contracts he signed consistently stipulated that his services as a project worker were The completion of the project or any phase thereof is determined on the date originally
being sought. There was an informed consent to be engaged as such. His consent was not agreed upon or the date indicated in the contract, or if the same is extended, the date of
vitiated. As a matter of fact, Ando did not even allege that force, duress or improper termination of project extension.[43]
pressure were used against him in order to agree. His being a carpenter does not suffice.
Ando's tenure as a project employee remained definite because there was certainty of
There was no attempt to frustrate Ando's security of tenure. His employment was for a completion or termination of the Bahay Pamulinawen and the West Insula Projects. The
specific project or undertaking because the nature of EGI's business is one which will not project employment  contracts sufficiently apprised him that his security of tenure with
allow it to employ workers for an indefinite period. As a corporation engaged in EGI would only last as long as the specific projects he was assigned to were subsisting.
construction and residential projects, EGI depends for its business on the contracts it is When the projects were completed, he was validly terminated from employment since his
able to obtain. Since work depends on the availability of such contracts, necessarily the engagement was coterminous thereto.
duration of the employment of its work force is not permanent but coterminous with the
projects to which they are assigned and from whose payrolls they are paid. [38] It would be The fact that Ando was required to render services necessary or desirable in the
extremely burdensome for EGI as an employer if it would have to carry them as operation of EGI's business for more than a year does not in any way impair the validity

64
of his project employment contracts. Time and again, We have held that the length of
service through  repeated and successive rehiring is not the controlling determinant of
the employment tenure of a project employee. [44]   The rehiring of construction workers
on a project-to-project  basis does not confer upon them regular employment status as it
is only dictated by the practical consideration that experienced construction workers are
more preferred.[45]  In Ando's case, he was rehired precisely because of his previous
experience working with the other phases of the project. EGI took into account similarity
of working environment. Moreover-
x x x It is widely known that in the construction industry, a project employee's work
depends on the availability of projects, necessarily the. duration of his employment. It is
not permanent but coterminous with the work to which he is assigned. It would be
extremely burdensome for the employer, who depends on the availability of projects, to
carry him as a permanent employee and pay him wages even if there are no projects for
him to work on. The rationale behind this is that once the project is completed it would
be unjust to require the employer to maintain these employees in their payroll. To do so
would make the employee a privileged retainer who collects payment from his employer
for work not done. This is extremely unfair to the employers and amounts to labor
coddling at the expense of management.[46]

Finally, the second paragraph of Article 280, stating that an employee who has rendered
service for at least one (1) year shall be considered a regular employee, is applicable only
to a casual employee and not to a project or a regular employee referred to in paragraph
one thereof.[47]

The foregoing considered, EGI did not violate any requirement of procedural due process
by failing to give Ando advance notice of his termination. Prior notice of termination is
not part of procedural due process if the termination is brought about by the completion
of the contract or phase thereof for which the project employee was engaged. [48] Such
completion automatically terminates the employment and the employer is, under the law,
only required to render a report to the Department of Labor and Employment (DOLE) on
the termination of employment.[49] In this case, it is undisputed that EGI submitted the
required Establishment Employment Reports to DOLE-NCR  Makati/Pasay  Field  Office 
regarding  Ando's "temporary  lay-off' effective February 16, 2011 and "permanent
termination" effective May 2, 2011. [50]

WHEREFORE, premises considered, the petition is GRANTED. The February 28, 2014
Decision and September 4, 2014 Resolution of the Court of Appeals in CA-G.R.   SP No. 
126624,  which  annulled  the Resolutions dated May 25, 2012 and July 17, 2012 of the
National Labor Relations Commission  which affirmed in toto the December  29, 2011
Decision of the Labor Arbiter, are REVERSED AND SET ASIDE. The Decision of the Labor
Arbiter is REINSTATED.

SO ORDERED.

Carpio, J., Chairperson, Mendoza, Leonen, and Jardeleza , JJ., concur.

65
 FIRST DIVISION
G.R. No. 192394, July 03, 2013
ROY D. PASOS, PETITIONER, VS. PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, RESPONDENT.

DECISION
VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the  March 26, 2010  Decision [1] and May 26, 2010
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 107805.  The appellate court
had affirmed the Decision[3] of the National Labor Relations Commission (NLRC)
dismissing the illegal dismissal complaint filed by petitioner Roy D. Pasos against
respondent Philippine National Construction Corporation (PNCC).

The antecedent facts follow:

Petitioner Roy D. Pasos started working for respondent PNCC on April 26, 1996.  Based
on the PNCC’s “Personnel Action Form Appointment for Project Employment” dated April
30, 1996,[4] petitioner was designated as “Clerk II (Accounting)” and was assigned to the
“NAIA – II Project.”  It was likewise stated therein:

PARTICULARS: Project employment starting on April 26, 1996 to July 25, 1996.  This
contract maybe terminated at anytime for cause as provided for by law and/or existing
Company Policy. This maybe terminated if services are unsatisfactory, or when it shall no
longer needed, as determined by the Company.  If services are still needed beyond the
validity of this contract, the Company shall extend your services.  After services are
terminated, the employee shall be under no obligation to re-employ with the Company
nor shall the Company be obliged to re-employ the employee. [5]  (Emphasis supplied.)

Petitioner’s employment, however, did not end on July 25, 1996 but was extended until
August 4, 1998, or more than two years later, based on the “Personnel Action Form –
Project Employment” dated July 7, 1998.[6]

Based on PNCC’s “Appointment for Project Employment” dated November 11, 1998, [7]
petitioner was rehired on even date as “Accounting Clerk (Reliever)” and assigned to the
“PCSO – Q.I. Project.”  It was stated therein that his employment shall end on February 11,
1999 and may be terminated for cause or in accordance with the provisions of Article 282
of the Labor Code, as amended.  However, said employment did not actually end on
February 11, 1999 but was extended until February 19, 1999 based on the “Personnel
Action Form-Project Employment” dated February 17, 1999. [8]

On February 23, 1999, petitioner was again hired by PNCC as “Accounting Clerk” and was
assigned to the “SM-Project” based on the “Appointment for Project Employment” dated
February 18, 1999.[9]  It did not specify the date when his employment will end but it was

66
stated therein that it will be “co-terminus with the completion of the project.”  Said Reports it purportedly filed with the DOLE.  They were for: (1) the “PCSO-Q.I. Project” for
employment supposedly ended on August 19, 1999 per “Personnel Action Form – Project February 1999;[15] (2) “SM Project” for August 1999; [16] and (3) “SM Project” for October
Employment” dated August 18, 1999, [10] where it was stated, “[t]ermination of 2000,[17] all of which included petitioner as among the affected employees.  The
[petitioner’s] project employment due to completion of assigned phase/stage of work or submission of termination reports by PNCC was however disputed by petitioner based on
project effective at the close of office hour[s] on 19 August 1999.”  However, it appears the verifications[18] issued by the DOLE NCR office that he was not among the affected
that said employment was extended per “Appointment for Project employment” dated employees listed in the reports filed by PNCC in August 1998, February 1999, August
August 20, 1999[11] as petitioner was again appointed as “Accounting Clerk” for “SM 1999 and October 2000.
Project (Package II).”  It did not state a specific date up to when his extended employment
will be, but it provided that it will be “co-terminus with the x x x project.”  In “Personnel On March 28, 2006, the Labor Arbiter rendered a Decision [19] in favor of petitioner.  The
Action Form – Project Employment” dated October 17, 2000, [12] it appears that such fallo reads:
extension would eventually end on October 19, 2000.
WHEREFORE, premises considered, the complainant had attained regular employment
Despite the termination of his employment on October 19, 2000, petitioner claims that thereby making his termination from employment illegal since it was not for any valid or
his superior instructed him to report for work the following day, intimating to him that authorized causes. Consequently, Respondent is ordered to pay complainant his full
he will again be employed for the succeeding SM projects.  For purposes of backwages less six (6) months computed as follows:
reemployment, he then underwent a medical examination which allegedly revealed that Backwages:
he had pneumonitis. Petitioner was advised by PNCC’s physician, Dr. Arthur C. Obena, to
take a 14-day sick leave. Feb. 18, 2000 – March 28, 2006 = 73.33 mos.
P6,277.00 x 73.33 =  P460,292.41
On November 27, 2000, after serving his sick leave, petitioner claims that he was again Less:
referred for medical examination where it was revealed that he contracted Koch’s P6,277.00 X 6 mos. =  37,662.00
disease.  He was then required to take a 60-day leave of absence. [13]  The following day, he                                  P422,630.41
submitted his application for sick leave but PNCC’s Project Personnel Officer, Mr. R.S.
Sanchez, told him that he was not entitled to sick leave because he was not a regular The reinstatement could not as well be ordered due to the strained relations between the
employee. parties, that in lieu thereof, separation pay is ordered paid to complainant in the amount
of P37,662.00 [P6,277.00 x 6].
Petitioner still served a 60-day sick leave and underwent another medical examination on
February 16, 2001.  He was then given a clean bill of health and was given a medical SO ORDERED.[20]
clearance by Dr. Obena that he was fit to work.
The Labor Arbiter ruled that petitioner attained regular employment status with the
Petitioner claims that after he presented his medical clearance to the Project Personnel repeated hiring and rehiring of his services more so when the services he was made to
Officer on even date, he was informed that his services were already terminated on render were usual and necessary to PNCC’s business.  The Labor Arbiter likewise found
October 19, 2000 and he was already replaced due to expiration of his contract.  This that from the time petitioner was hired in 1996 until he was terminated, he was hired
prompted petitioner on February 18, 2003 to file a complaint[14] for illegal dismissal and rehired by PNCC and made to work not only in the project he had signed to work on
against PNCC with a prayer for reinstatement and back wages.  He argued that he is but on other projects as well, indicating that he is in fact a regular employee.  He also
deemed a regular employee of PNCC due to his prolonged employment as a project noted petitioner’s subsequent contracts did not anymore indicate the date of completion
employee as well as the failure on the part of PNCC to report his termination every time a of the contract and the fact that his first contract was extended way beyond the supposed
project is completed. He further contended that his termination without the benefit of an completion date.  According to the Labor Arbiter, these circumstances indicate that the
administrative investigation was tantamount to an illegal dismissal. employment is no longer a project employment but has graduated into a regular one. 
Having attained regular status, the Labor Arbiter ruled that petitioner should have been
PNCC countered that petitioner was hired as a project employee in several projects with accorded his right to security of tenure.
specific dates of engagement and termination and had full knowledge and consent that Both PNCC and petitioner appealed the Labor Arbiter’s decision. PNCC insisted that
his appointment was only for the duration of each project.  It further contended that it petitioner was just a project employee and his termination was brought about by the
had sufficiently complied with the reportorial requirements to the Department of Labor completion of the contract and therefore he was not illegally dismissed. Petitioner, on the
and Employment (DOLE).  It submitted photocopies of three Establishment Termination other hand, argued that his reinstatement should have been ordered by the Labor Arbiter

67
since there was no proof that there were strained relations between the parties.  He also PURPOSES OF APPEAL WAS SUFFICIENT NOTWITHSTANDING THAT THE SAME IS LESS
questioned the deduction of six months pay from the back wages awarded to him and the THAN THE ADJUDGED AMOUNT.
failure of the Labor Arbiter to award him damages and attorney’s fees.  Petitioner
likewise moved to dismiss PNCC’s appeal contending that the supersedeas bond in the II.
amount of P422,630.41 filed by the latter was insufficient considering that the Labor
Arbiter’s monetary award is P460,292.41.  He also argued that the person who verified SUSTAINED THAT FELIX M. ERECE, JR., HEAD OF RESPONDENT PNCC’S PERSONNEL
the appeal, Felix M. Erece, Jr., Personnel Services Department Head of PNCC, has no SERVICE DEPARTMENT, IS DULY AUTHORIZED TO REPRESENT RESPONDENT IN THIS
authority to file the same for and in behalf of PNCC. CASE NOTWITHSTANDING THE ABSENCE OF ANY BOARD RESOLUTION OR
SECRETARY’S CERTIFICATE OF THE RESPONDENT STATING THAT INDEED HE WAS
On October 31, 2008, the NLRC rendered its Decision granting PNCC’s appeal but DULY AUTHORIZED TO INSTITUTE [THESE] PROCEEDINGS.
dismissing that of petitioner.  The dispositive portion reads:
III.
WHEREFORE, premises considered, the appeal of respondent is GRANTED and the
Decision dated 28 March 2006 is REVERSED and SET ASIDE. SUSTAINED THAT PETITIONER WAS A PROJECT EMPLOYEE DESPITE THE FACT THAT
RESPONDENT PNCC HAD NOT SUBMITTED THE REQUISITE TERMINATION REPORTS IN
A new Decision is hereby issued ordering respondent Philippine National Construction ALL OF THE ALLEGED PROJECTS WHERE THE PETITIONER WAS ASSIGNED.
Corporation to pay completion bonus to complainant Roy Domingo Pasos in the amount IV.
of P25,000.
SUSTAINED THAT THE PETITIONER IS A PROJECT EMPLOYEE DESPITE THE
Complainant’s appeal is DISMISSED for lack of merit. CIRCUMSTANCE THAT THE ACTUAL WORK UNDERTAKEN BY THE PETITIONER WAS
NOT LIMITED TO THE WORK DESCRIBED IN HIS ALLEGED APPOINTMENT AS A
SO ORDERED.[21] PROJECT EMPLOYEE.

As to the procedural issues raised by petitioner, the NLRC ruled that there was V.
substantial compliance with the requirement of an appeal bond and that Mr. Erece, Jr., as
head of the Personnel Services Department, is the proper person to represent PNCC.  As FAILED TO FIND THAT AT SOME TIME, THE EMPLOYMENT OF THE PETITIONER WAS
to the substantive issues, the NLRC found that petitioner was employed in connection UNREASONABLY EXTENDED BEYOND THE DATE OF ITS COMPLETION AND AT OTHER
with certain construction projects and his employment was co-terminus with each TIMES THE SAME DID NOT BEAR A DATE OF COMPLETION OR THAT THE SAME WAS
project as evidenced by the Personnel Action Forms and the Termination Report READILY DETERMINABLE AT THE TIME OF PETITIONER’S ENGAGEMENT THEREBY
submitted to the DOLE.  It likewise noted the presence of the following project INDICATING THAT HE WAS NOT HIRED AS A PROJECT EMPLOYEE.
employment indicators in the instant case, namely, the duration of the project for which
petitioner was engaged was determinable and expected completion was known to VI.
petitioner; the specific service that petitioner rendered in the projects was that of an
accounting clerk and that was made clear to him and the service was connected with the FAILED TO ORDER THE REINSTATEMENT OF THE PETITIONER BY FINDING THAT
projects; and PNCC submitted termination reports to the DOLE and petitioner’s name was THERE WAS STRAINED RELATIONS BETWEEN THE PARTIES NOTWITHSTANDING
included in the list of affected employees. THAT THE RESPONDENT NEVER EVEN ALLEGED NOR PROVED IN ITS PLEADINGS THE
CIRCUMSTANCE OF STRAINED RELATIONS.
Petitioner elevated the case to the CA via a petition for certiorari but the appellate court
dismissed the same for lack of merit. VII.

Hence this petition.  Petitioner argues that the CA erred when it: SUSTAINED  THE FAILURE OF THE NATIONAL LABOR RELATIONS COMMISSION TO
RECTIFY THE ERROR COMMITTED BY LABOR ARBITER LIBO-ON IN DEDUCTING THE
I. EQUIVALENT OF SIX MONTHS PAY OF BACKWAGES DESPITE THE MANDATE OF THE
LABOR CODE THAT WHEN THERE IS A FINDING OF ILLEGAL DISMISSAL, THE PAYMENT
SUSTAINED THAT THE AMOUNT OF THE BOND POSTED BY THE RESPONDENTS FOR OF FULL BACKWAGES FROM DATE OF DIMISSAL [UP TO] ACTUAL REINSTATEMENT

68
SHOULD BE AWARDED. Substantial compliance with
appeal bond requirement
VIII.
The perfection of an appeal within the reglementary period and in the manner prescribed
SUSTAINED THE FAILURE OF THE NATIONAL LABOR RELATIONS COMMISSION TO by law is jurisdictional, and noncompliance with such legal requirement is fatal and
RECTIFY THE ERROR COMMITTED BY LABOR ARBITER LIBO-ON IN FAILING TO AWARD effectively renders the judgment final and executory.  As provided in Article 223 of the
DAMAGES AND ATTORNEY’S FEES TO THE PETITIONER. [22] Labor Code, as amended, in case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon the posting of a cash or surety bond issued by a
Petitioner contends that PNCC’s appeal from the Labor Arbiter’s decision should not have reputable bonding company duly accredited by the Commission in the amount equivalent
been allowed since the appeal bond filed was insufficient.  He likewise argues that the to the monetary award in the judgment appealed from.
appellate court erred in heavily relying in the case of Cagayan Valley Drug Corporation v.
Commissioner of Internal Revenue[23] which enumerated the officials and employees who However, not only in one case has this Court relaxed this requirement in order to bring
can sign the verification and certification without need of a board resolution.  He about the immediate and appropriate resolution of cases on the merits. [24] In Quiambao v.
contends that in said case, there was substantial compliance with the requirement since a National Labor Relations Commission,[25] this Court allowed the relaxation of the
board resolution was submitted albeit belatedly unlike in the instant case where no requirement when there is substantial compliance with the rule.  Likewise, in Ong v.
board resolution was ever submitted even belatedly. Court of Appeals,[26] the Court held that the bond requirement on appeals may be relaxed
when there is substantial compliance with the Rules of Procedure of the NLRC or when
As to the substantive issue, petitioner submits that the CA erroneously concluded that he the appellant shows willingness to post a partial bond.  The Court held that “[w]hile the
was a project employee when there are indicators which point otherwise.  He contends bond requirement on appeals involving monetary awards has been relaxed in certain
that even if he was just hired for the NAIA 2 Project from April 26, 1996 to July 25, 1996, cases, this can only be done where there was substantial compliance of the Rules or
he was made to work until August 4, 1998.  He also avers the DOLE had certified that he where the appellants, at the very least, exhibited willingness to pay by posting a partial
was not among the employees listed in the termination reports submitted by PNCC which bond.”
belies the photocopies of termination reports attached by PNCC to its pleadings listing
petitioner as one of the affected employees.  Petitioner points out that said termination In the instant case, the Labor Arbiter in his decision ordered PNCC to pay petitioner back
reports attached to PNCC’s pleadings are mere photocopies and were not even certified wages amounting to P422,630.41 and separation pay of P37,662 or a total of
by the DOLE-NCR as true copies of the originals on file with said office.  Further, he P460,292.41.  When PNCC filed an appeal bond amounting to P422,630.41 or at least
argues that in violation of the requirement of Department Order No. 19 that the duration 90% of the adjudged amount, there is no question that this is substantial compliance
of the project employment is reasonably determinable, his contracts for the SM projects with the requirement that allows relaxation of the rules.
did not specify the date of completion of the project nor was the completion determinable
at the time that petitioner was hired. Validity of the verification and certification
signed by a corporate officer on behalf of the
PNCC counters that documentary evidence would show that petitioner was clearly a corporation without the requisite board
project employee and remained as such until his last engagement.  It argues that the resolution or secretary’s certificate
repeated rehiring of petitioner as accounting clerk in different projects did not make him
a regular employee.  It also insists that it complied with the reportorial requirements and It has been the constant holding of this Court in cases instituted by corporations that an
that it filed and reported the termination of petitioner upon every completion of project individual corporate officer cannot exercise any corporate power pertaining to the
to which he was employed. corporation without authority from the board of directors pursuant to Section 23, in
relation to Section 25 of the Corporation Code which clearly enunciates that all corporate
In sum, three main issues are presented before this Court for resolution: (1) Should an powers are exercised, all business conducted, and all properties controlled by the board
appeal be dismissed outright if the appeal bond filed is less than the adjudged amount?  of directors.  However, we have in many cases recognized the authority of some
(2) Can the head of the personnel department sign the verification and certification on corporate officers to sign the verification and certification against forum-shopping.  Some
behalf of the corporation sans any board resolution or secretary’s certificate authorizing of these cases were enumerated in Cagayan Valley Drug Corporation v. Commissioner of
such officer to do the same? and (3) Is petitioner a regular employee and not a mere Internal Revenue[27] which was cited by the appellate court:
project employee and thus can only be dismissed for cause?
In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a

69
general manager or acting general manager to sign the verification and certificate against As to the defective verification in the appeal memorandum before the NLRC, the same
forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an liberality applies.  After all, the requirement regarding verification of a pleading is formal,
“employment specialist” who had not even presented any proof of her authority to not jurisdictional. Such requirement is simply a condition affecting the form of pleading,
represent the company;  in Novelty Philippines, Inc. v. CA, we ruled that a personnel officer the non-compliance of which does not necessarily render the pleading fatally defective.
who signed the petition but did not attach the authority from the company is authorized Verification is simply intended to secure an assurance that the allegations in the pleading
to sign the verification and non-forum shopping certificate; and in Lepanto Consolidated are true and correct and not the product of the imagination or a matter of speculation,
Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the and that the pleading is filed in good faith. The court or tribunal may order the correction
Chairperson of the Board and President of the Company can sign the verification and of the pleading if verification is lacking or act on the pleading although it is not verified, if
certificate against non-forum shopping even without the submission of the board’s the attending circumstances are such that strict compliance with the rules may be
authorization. dispensed with in order that the ends of justice may thereby be served. [32]
In sum, we have held that the following officials or employees of the company can sign
the verification and certification without need of a board resolution: (1) the Chairperson Duration of project employment should
of the Board of Directors, (2) the President of a corporation, (3) the General Manager or be determined at the time of hiring
Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a
labor case. In the instant case, the appointments issued to petitioner indicated that he was hired for
specific projects. This Court is convinced however that although he started as a project
While the above cases do not provide a complete listing of authorized signatories to the employee, he eventually became a regular employee of PNCC.
verification and certification required by the rules, the determination of the sufficiency of
the authority was done on a case to case basis.  The rationale applied in the foregoing Under Article 280 of the Labor Code, as amended, a project employee is one whose
cases is to justify the authority of corporate officers or representatives of the corporation “employment has been fixed for a specific project or undertaking the completion or
to sign the verification or certificate against forum shopping, being “in a position to verify termination of which has been determined at the time of the engagement of the employee
the truthfulness and correctness of the allegations in the petition.” [28]  (Citations omitted.) or where the work or services to be performed is seasonal in nature and the employment
is for the duration of the season.” Thus, the principal test used to determine whether
While we agree with petitioner that in Cagayan Valley, the requisite board resolution was employees are project employees is whether or not the employees were assigned to carry
submitted though belatedly unlike in the instant case, this Court still recognizes the out a specific project or undertaking, the duration or scope of which was specified at the
authority of Mr. Erece, Jr. to sign the verification and certification on behalf of PNCC sans time the employees were engaged for that project. [33]
a board resolution or secretary’s certificate as we have allowed in Pfizer, Inc. v. Galan,[29]
one of the cases cited in Cagayan Valley.  In Pfizer, the Court ruled as valid the verification In the case at bar, petitioner worked continuously for more than two years after the
signed by an employment specialist as she was in a position to verify the truthfulness and supposed three-month duration of his project employment for the NAIA II Project.  While
correctness of the allegations in the petition [30] despite the fact that no board resolution his appointment for said project allowed such extension since it specifically provided that
authorizing her was ever submitted by Pfizer, Inc. even belatedly.  We believe that like the in case his “services are still needed beyond the validity of [the] contract, the Company
employment specialist in Pfizer, Mr. Erece, Jr. too, as head of the Personnel Services shall extend [his] services,” there was no subsequent contract or appointment that
Department of PNCC, was in a position to assure that the allegations in the pleading have specified a particular duration for the extension.  His services were just extended
been prepared in good faith and are true and correct. indefinitely until “Personnel Action Form – Project Employment” dated July 7, 1998 was
issued to him which provided that his employment will end a few weeks later or on
Even assuming that the verification in the appeal filed by PNCC is defective, it is well August 4, 1998.  While for first three months, petitioner can be considered a project
settled that rules of procedure in labor cases maybe relaxed. As provided in Article 221 of employee of PNCC, his employment thereafter, when his services were extended without
the Labor Code, as amended, “rules of evidence prevailing in courts of law or equity shall any specification of as to the duration, made him a regular employee of PNCC.  And his
not be controlling and it is the spirit and intention of this Code that the Commission and status as a regular employee was not affected by the fact that he was assigned to several
its members and the Labor Arbiters shall use every and all reasonable means to ascertain other projects and there were intervals in between said projects since he enjoys security
the facts in each case speedily and objectively and without regard to technicalities of law of tenure.
or procedure, all in the interest of due process.” Moreover, the requirement of verification
is merely formal and not jurisdictional.  As held in Pacquing v. Coca-Cola Philippines, Inc. Failure of an employer to file termination
[31]
: reports after every project completion proves
that an employee is not a project employee

70
 Labor Code is it provided that the reportorial requirement is dispensed with.  The fact is
As a rule, the findings of fact of the CA are final and conclusive and this Court will not that Department Order No. 19 superseding Policy Instruction No. 20 expressly provides
review them on appeal.[34]  The rule, however, is subject to the following exceptions: that the report of termination is one of the indicators of project employment. [37]
The jurisdiction of the Court in cases brought before it from the appellate court is limited
to reviewing errors of law, and findings of fact of the Court of Appeals are conclusive A regular employee dismissed for a cause
upon the Court since it is not the Court’s function to analyze and weigh the evidence all other than the just or authorized causes
over again.  Nevertheless, in several cases, the Court enumerated the exceptions to the provided by law is illegally dismissed
rule that factual findings of the Court of Appeals are binding on the Court: (1) when the
findings are grounded entirely on speculations, surmises or conjectures; (2) when the Petitioner’s regular employment was terminated by PNCC due to contract expiration or
inference made is manifestly mistaken, absurd or impossible; (3) when there is grave project completion, which are both not among the just or authorized causes provided in
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) the Labor Code, as amended, for dismissing a regular employee. Thus, petitioner was
when the findings of fact are conflicting; (6) when in making its findings the Court of illegally dismissed.
Appeals went beyond the issues of the case, or its findings are contrary to the admissions
of both the appellant and the appellee; (7) when the findings are contrary to that of the Article 279 of the Labor Code, as amended, provides that an illegally dismissed employee
trial court; (8) when the findings are conclusions without citation of specific evidence on is entitled to reinstatement, full back wages, inclusive of allowances, and to his other
which they are based; (9) when the facts set forth in the petition as well as in the benefits or their monetary equivalent from the time his compensation was withheld from
petitioner’s main and reply briefs are not disputed by the respondent; (10) when the him up to the time of his actual reinstatement.
findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record; or (11) when the Court of Appeals manifestly overlooked certain We agree with petitioner that there was no basis for the Labor Arbiter’s finding of
relevant facts not disputed by the parties, which, if properly considered, would justify a strained relations and order of separation pay in lieu of reinstatement. This was neither
different conclusion.[35] alleged nor proved.  Moreover, it has long been settled that the doctrine of strained
relations should be strictly applied so as not to deprive an illegally dismissed employee of
In this case, records clearly show that PNCC did not report the termination of petitioner’s his right to reinstatement.  As held in Globe-Mackay Cable and Radio Corporation v. NLRC:
[38]
supposed project employment for the NAIA II Project to the DOLE. Department Order No.
19, or the “Guidelines Governing the Employment of Workers in the Construction
Industry,” requires employers to submit a report of an employee’s termination to the Obviously, the principle of “strained relations” cannot be applied indiscriminately.
nearest public employment office every time an employee’s employment is terminated Otherwise, reinstatement can never be possible simply because some hostility is
due to a completion of a project.  PNCC submitted as evidence of its compliance with the invariably engendered between the parties as a result of litigation. That is human nature.
requirement supposed photocopies of its termination reports, each listing petitioner as
among the employees affected.  Unfortunately, none of the reports submitted pertain to Besides, no strained relations should arise from a valid and legal act of asserting one’s
the NAIA II Project.  Moreover, DOLE NCR verified that petitioner is not included in the right; otherwise an employee who shall assert his right could be easily separated from
list of affected workers based on the termination reports filed by PNCC on August 11, 17, the service, by merely paying his separation pay on the pretext that his relationship with
20 and 24, 1998 for petitioner’s supposed dismissal from the NAIA II Project effective his employer had already become strained. [39]
August 4, 1998.  This certification from DOLE was not refuted by PNCC.  In Tomas Lao
Construction v. NLRC,[36] we emphasized the indispensability of the reportorial As to the back wages due petitioner, there is likewise no basis in deducting therefrom
requirement: back wages equivalent to six months “representing the maximum period of confinement
[PNCC] can require him to undergo medical treatment.”  Besides, petitioner was not
Moreover, if private respondents were indeed employed as “project employees,” dismissed on the ground of disease but expiration of term of project employment.
petitioners should have submitted a report of termination to the nearest public
employment office every time their employment was terminated due to completion of Regarding moral and exemplary damages, this Court rules that petitioner is not entitled
each construction project.  The records show that they did not.  Policy Instruction No. 20 to them.  Worth reiterating is the rule that moral damages are recoverable where the
is explicit that employers of project employees are exempted from the clearance dismissal of the employee was attended by bad faith or fraud or constituted an act
requirement but not from the submission of termination report.  We have consistently oppressive to labor, or was done in a manner contrary to morals, good customs, or public
held that failure of the employer to file termination reports after every project policy.  Likewise, exemplary damages may be awarded if the dismissal was effected in a
completion proves that the employees are not project employees. Nowhere in the New wanton, oppressive or malevolent manner.[40]  Apart from his allegations, petitioner did

71
not present any evidence to prove that his dismissal was attended with bad faith or was
done oppressively.

Petitioner is also entitled to attorney’s fees in the amount of ten percent (10%) of his
total monetary award, having been forced to litigate in order to seek redress of his
grievances, as provided in Article 111 of the Labor Code, as amended, and following this
Court’s pronouncement in Exodus International Construction Corporation v. Biscocho.[41]

In line with current jurisprudence, the award of back wages shall earn legal interest at the
rate of six percent (6%) per annum from the date of petitioner’s dismissal until the
finality of this decision.[42]  Thereafter, it shall earn 12% legal interest until fully paid [43] in
accordance with the guidelines in Eastern Shipping Lines, Inc. v. Court of Appeals.[44]

WHEREFORE, the petition is GRANTED.  The assailed March 26, 2010 Decision and May
26, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 107805 are hereby
REVERSED.  The decision of the Labor Arbiter is hereby REINSTATED with the following
MODIFICATIONS:

1) respondent PNCC is DIRECTED to pay petitioner Roy D. Pasos full back wages from
the time of his illegal dismissal on October 19, 2000 up to the finality of this Decision,
with interest at 6% per annum, and 12% legal interest thereafter until fully paid;

2) respondent PNCC is ORDERED to reinstate petitioner Pasos to his former position or

to a substantially equivalent one, without loss of seniority rights and other benefits
attendant to the position; and

3) respondent PNCC is DIRECTED to pay petitioner Pasos attorney’s fees equivalent to

10% of his total monetary award.

No pronouncement as to costs.

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes, JJ., concur.

72
 THIRD DIVISION WHEREFORE, the complaints for illegal dismissal are dismissed for lack of merit.
G.R. No. 204406, February 26, 2014 Respondent Marulas Industrial Corporation is, however, ordered to pay complainants
MACARTHUR MALICDEM AND HERMENIGILDO FLORES, PETITIONERS, VS. wage differential in the following amounts:
MARULAS INDUSTRIAL CORPORATION AND MIKE MANCILLA, RESPONDENTS.
1. Macarthur Malicdem ₱20,111.26
DECISION
MENDOZA, J.:

This petition for review on certiorari[1] under Rule 45 of the Rules of Court filed by 2/2/07 – 6/13/08 = None
Macarthur Malicdem (Malicdem) and Hermenigildo Flores (Flores) assails the July 18,
2012 Decision[2] and the November 12, 2012 Resolution [3] of the Court of Appeals(CA)in
CA-G.R. SP No. 124470,dismissing their petition for certiorari under Rule 65 in an action 6/14/08 – 8/27/08 = 2.47 mos.
for illegal dismissal.

The Facts: ₱377 – 362 = ₱15

[4]
A complaint for illegal dismissal, separation pay, money claims, moral and exemplary
damages, and attorney's fees was filed by petitioners Malicdem and Flores against
respondents Marulas Industrial Corporation (Marulas) and Mike Mancilla(Mancilla), who x 26 days x 2.47 mos. = 963.30
were engaged in the business of manufacturing sacks intended for local and export
markets.
8/28/08 – 6/30/10 = 22.06 mos.
Malicdem and Flores were first hired by Marulas as extruder operators in 2006, as shown
by their employment contracts. They were responsible for the bagging of filament yarn,
the quality of pp yarn package and the cleanliness of the work place area. Their ₱382 – ₱362 = ₱20
employment contracts were for a period of one (1) year. Every year thereafter, they
would sign a Resignation/Quitclaim in favor of Marulas a day after their contracts ended,
and then sign another contract for one (1) year. Until one day, on December 16, 2010,
Flores was told not to report for work anymore after being asked to sign a paper by x 26 days x 22.06 mos. = 11,471.20
Marulas' HR Head to the effect that he acknowledged the completion of his contractual
status. On February 1, 2011, Malicdem was also terminated after signing a similar
document. Thus, both claimed to have been illegally dismissed. 7/1/10 – 2/2/11 = 7.03 mos.

Marulascountered that their contracts showed that they were fixed-term employees for a
specific undertaking which was to work on a particular order of a customer for a specific ₱404 – ₱362 = ₱42
period. Their severance from employment was due to the expiration of their contracts.

On February 7, 2011, Malicdem and Flores lodged a complaint against Marulas and
Mancilla for illegal dismissal. x 26 days x 7.03 mos. = 7,676.76

On July 13, 2011, the Labor Arbiter (LA) rendered a decision[5] in favor of the 20,111.26
respondents, finding no illegal dismissal. He ruled that Malicdemand Flores were not
terminated and that their employment naturally ceased when their contracts expired. ; and
The LA, however, ordered Marulas to pay Malicdem and Flores their respective wage
differentials, to wit: 2. Herminigildo Flores ₱18,440.50

73
 2/2/08 – 6/13/08 = 4.36 mos. None been determined at the time of the engagement of the employee.” [10]

6/14/08 – 8/27/08 = 963.30 Corollarily, considering that there was no illegal dismissal, the CA ruled that payment of
backwages, separation pay, damages, and attorney's fees had no factual and legal bases.
8/28/08 – 6/30/10 = 11,471.20 Hence, they could not be awarded to the petitioners.

7/1/10 – 12/16/10 = 5.50 mos. Aggrieved, Malicdem and Flores filed a motion for reconsideration, but their pleaswere
denied in the CA Resolution, dated November 12, 2012.
₱404 x ₱362 = ₱42

x 26 days x 5.50 mos. = 6,006.00 The Petition

Malicdem and Flores now come before this Court by way of a petition for review on
18,440.50 certiorari under Rule 45 of the Rules of Court praying for thereversal of the CA decision
anchored on the principalargument that the appellate court erred in affirming the NLRC
decision that there was no illegal dismissal because the petitioners’ contracts of
All other claims are dismissed for lack of merit. employment with the respondents simply expired. They claim that their continuous
rehiring paved the way for their regularization and, for said reason,they could not be
SO ORDERED.[6] terminated from their jobs without just cause.

Malicdem and Flores appealed to the NLRC which partially granted their appeal with the In their Comment,[11] the respondentsaverred that the petitioners failed to show that the
award of payment of 13th month pay, service incentive leave and holiday pay for three (3) CA erred in affirming the NLRC decision. They posit that the petitioners were contractual
years. The dispositive portion of its December 19, 2011 Decision [7] reads: employees and their rehiring did not amount to regularization. The CA cited William Uy
Construction Corp. v. Trinidad,[12] where it was held that the repeated and successive
WHEREFORE, the appeal is GRANTED IN PART. The Decision of Labor Arbiter Raymund rehiring of project employees did not qualify them as regular employees, as length of
M. Celino, dated July 13, 2011, is MODIFIED. In addition to the award of salary service was not the controlling determinant of the employment tenure of a project
differentials, complainants should also be awarded 13 th month pay, service incentive employee, but whether the employment had been fixed for a specific project or
leave and holiday pay for three years. undertaking, its completion had been determined at the time of the engagement of the
employee. The respondents add that for said reason, the petitioners were not entitled to
SO ORDERED.[8] full backwages, separation pay, moral and exemplary damages, and attorney’s fees.
Still, petitioners filed a motion for reconsideration, but it was denied by the NLRC on
February 29, 2011. Now, the question is whether or not the CA erred in not finding any grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the NLRC.
Aggrieved, Malicdem and Flores filed a petition for certiorari under Rule 65 with the CA.
The Court’s Ruling:
On July 18, 2012, the CA denied the petition,[9] finding no grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the NLRC. It ruled that the issue The Court grants the petition.
of whether or not the petitioners were project employees or regular employees was
factual in nature and, thus, not within the ambit of a petition for certiorari. Moreover, it The petitioners have convincingly shownthat they should be considered regular
accorded respect and due consideration to the factual findings of the NLRC, affirming employees and, as such, entitled to full backwages and other entitlements.
those of the LA, as they were supported by substantial evidence.
A reading of the 2008 employment contracts, [13] denominated as “Project Employment
On the substantive issue, the CA explained that “the repeated and successive rehiring of Agreement,” reveals that there was a stipulated probationary period of six (6) months
project employees do not qualify them as regular employees,as length of service is not the from its commencement. It was provided therein that in the event that they would beable
controlling determinant of the employment tenure of a project employee, but whether to comply with the company’s standards and criteria within such period, they shall be
the employment has been fixed for a specific project or undertaking, its completion has reclassified as project employees with respect to the remaining period of the effectivity of

74
the contract. Specifically, paragraph 3(b) of the agreement reads: deliberate intent to prevent the regularization of the petitioners.

The SECOND PARTY hereby acknowledges, agrees and understands that the nature of To begin with, there is no actual project. The only stipulations in the contracts were the
his/her employment is probationary and on a project-basis. The SECOND PARTY further dates of their effectivity, the duties and responsibilities of the petitioners as extruder
acknowledges, agrees and understands that within the effectivity of this Contract, his/her operators, the rights and obligations of the parties, and the petitioners’ compensation and
job performance will be evaluated in accordance with the standards and criteria allowances. As there was no specific project or undertaking to speak of, the respondents
explained and disclosed to him/her prior to signing of this Contract. In the event that cannot invoke the exception in Article 280 of the Labor Code. [18] This is a clear attempt to
the SECOND PARTY is able to comply with the said standards and criteria within frustrate the regularization of the petitioners and to circumvent the law.
the probationary period of six month/s from commencement of this Contract,
he/she shall be reclassified as a project employee of (o)f the FIRST PARTY with Next, granting that they were project employees, the petitioners could only be considered
respect to the remaining period of the effectivity of this Contract. as regular employees as the two factors enumerated in Maraguinot, Jr., are present in this
case. It is undisputed that the petitioners were continuously rehired by the same
Under Article 281 of the Labor Code, however, “an employee who is allowed to work after employer for the same position as extruder operators. As such, they were responsible for
a probationary period shall be considered a regular employee.” When an employer the operation of machines that produced the sacks. Hence, their work wasvital, necessary
renews a contract of employment after the lapse of the six-month probationary period, and indispensable to the usual business or trade of the employer.
the employee thereby becomes a regular employee. No employer is allowed to determine
indefinitely the fitness of its employees.[14] While length of time is not the controlling test In D.M. Consunji, Inc. v. EstelitoJamin[19] and Liganza v. RBL Shipyard Corporation,[20] the
for project employment, it is vital in determining if the employee was hired for a specific Court reiterated the ruling that an employment ceases to be coterminous with specific
undertaking or tasked to perform functions vital, necessary and indispensable to the projects when the employee is continuously rehired due to the demands of the
usual business of trade of the employer.[15] Thus, in the earlier case of Maraguinot, Jr. v. employer’s business and re-engaged for many more projects without interruption.
NLRC,[16] it was ruled that a project or work pool employee, who has been: (1)
continuously, as opposed to intermittently, rehired by the same employer for the same The respondents cannot use the alleged expiration of the employment contracts of the
tasks or nature of tasks; and (2) those tasks are vital, necessary and indispensable to the petitioners as a shield of their illegal acts. The project employment contracts that the
usual business or trade of the employer, must be deemed a regular employee. Thus: petitioners were made to sign every year since the start of their employment were only a
x x x. Lest it be misunderstood, this ruling does not mean that simply because an stratagem to violate their security of tenure in the company. As restated in Poseidon
employee is a project or work pool employee even outside the construction industry, he Fishing v. NLRC,[21] “if from the circumstances it is apparent that periods have been
is deemed, ipso jure, a regular employee. All that we hold today is that once a project or imposed to preclude acquisition of tenurial security by the employee, they should be
work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by disregarded for being contrary to public policy.”
the same employer for the same tasks or nature of tasks; and (2) these tasks are vital,
necessary and indispensable to the usual business or trade of the employer, then the The respondents’ invocation of William Uy Construction Corp. v. Trinidad[22] is misplaced
employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code because it is applicable only in cases involving the tenure of project employees in the
and jurisprudence. To rule otherwise would allow circumvention of labor laws in construction industry. It is widely known that in the construction industry, a project
industries not falling within the ambit of Policy Instruction No. 20/Department Order No. employee's work depends on the availability of projects, necessarily the duration of his
19, hence allowing the prevention of acquisition of tenurial security by project or work employment.[23] It is not permanent but coterminous with the work to which he is
pool employees who have already gained the status of regular employees by the assigned.[24] It would be extremely burdensome for the employer, who depends on the
employer's conduct. availability of projects, to carry him as a permanent employee and pay him wages even if
there are no projects for him to work on.[25] The rationale behind this is that once the
The test to determine whether employment is regular or not is the reasonable connection project is completed it would be unjust to require the employer to maintain these
between the particular activity performed by the employee in relation to the usual employees in their payroll. To do so would make the employee a privileged retainer who
business or trade of the employer. If the employee has been performing the job for at collects payment from his employer for work not done. This is extremely unfair to the
least one year, even if the performance is not continuous or merely intermittent, the law employers and amounts to labor coddling at the expense of management. [26]”
deems the repeated and continuing need for its performance as sufficient evidence of the
necessity, if not indispensability of that activity to the business. [17] Now that it has been clearly established that the petitioners were regular employees,
their termination is considered illegal for lack of just or authorized causes. Under Article
Guided by the foregoing, the Court is of the considered view that there wasclearly a 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled

75
to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. The law intends the award of backwages and similar
benefits to accumulate past the date of the LA decision until the dismissed employee is
actually reinstated.

WHEREFORE, the petition is GRANTED. The assailed July 18, 2012 decision of the Court
of Appeals and its November 12, 2012 Resolution in CA-G.R. SP No. 124470,are hereby
ANNULLED and SET ASIDE.

Accordingly, respondentMarulas Industrial Corporation is hereby ordered to reinstate

petitioners Macarthur Malicdem and Hermenigildo Flores to their former positions
without loss of seniority rights and other privileges and to pay their full backwages,
inclusive of allowances and their other benefits or their monetary equivalent computed
from the time their compensations were withheld from them up to the time of their
actual reinstatement plus the wage differentials stated in the July 13, 2011 decision of the
Labor Arbiter, as modified by the December 19, 2011 NLRC decision.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Bersamin,* and Leonen, JJ., concur.

76
 FIRST DIVISION 

[G.R. No. 166109, February 23 : 2011]  2. Fernando S. Pereda Feb. 8, 1999 235.00

EXODUS INTERNATIONAL CONSTRUCTION CORPORATION AND ANTONIO P.

JAVALERA, PETITIONERS, VS. GUILLERMO BISCOCHO, FERNANDO PEREDA, 3. Ferdinand M. Mariano April 12, 1999 235.00
FERDINAND MARIANO, GREGORIO BELLITA AND MIGUEL BOBILLO, RESPONDENTS.

D E C I S I O N 
4. Gregorio S. Bellita May 20, 1999 225.00
DEL CASTILLO, J.:

In illegal dismissal cases, it is incumbent upon the employees to first establish the fact of
their dismissal before the burden is shifted to the employer to prove that the dismissal 5.  Miguel B. Bobillo March 10, 2000 220.00
was legal.

This Petition for Review on Certiorari[1] assails the Decision[2] dated August 10, 2004 of Guillermo Biscocho (Guillermo) was assigned at the Imperial Sky Garden from February
the Court of Appeals (CA) in CA-G.R. SP No. 79800, which dismissed the petition 8, 1999 to February 8, 2000.  Fernando Pereda (Fernando) worked in the same project
for certiorari challenging the Resolutions dated January 17, 2003 [3] and July 31, 2003[4] of from February 8, 1999 to June 17, 2000.  Likewise, Ferdinand Mariano (Ferdinand)
the National Labor Relations Commission (NLRC) in NLRC NCR CASE Nos. 30-11-04656- worked there from April 12, 1999 to February 17, 2000. All of them were then
00[5] and 30-12-04714-00. transferred to Pacific Plaza Towers.

Factual Antecedents Gregorio S. Bellita (Gregorio) was assigned to work at the house of Mr. Teofilo Yap in
Ayala Alabang, Muntinlupa City from May 20, 1999 to December 4, 1999.  Afterwards he
Petitioner Exodus International Construction Corporation (Exodus) is a duly licensed was transferred to Pacific Plaza Towers.
labor contractor for the painting of residential houses, condominium units and
commercial buildings. Petitioner Antonio P. Javalera is the President and General Miguel B. Bobillo (Miguel) was hired and assigned at Pacific Plaza Towers on March 10,
Manager of Exodus. 2000.

On February 1, 1999, Exodus obtained from Dutch Boy Philippines, Inc. (Dutch Boy) a On November 27, 2000, Guillermo, Fernando, Ferdinand, and Miguel filed a
contract[6] for the painting of the Imperial Sky Garden located at Ongpin Street, Binondo, complaint[8] for illegal dismissal and non-payment of holiday pay, service incentive leave
Manila.  On July 28, 1999, Dutch Boy awarded another contract [7] to Exodus for the pay, 13th month pay and night-shift differential pay.  This was docketed as NLRC NCR
painting of Pacific Plaza Towers in Fort Bonifacio, Taguig City. CASE No. 30-11-04656-00.

In the furtherance of its business, Exodus hired respondents as painters on different On December 1, 2000, Gregorio also filed a complaint [9] which was docketed as NLRC NCR
dates with the corresponding wages appearing opposite their names as hereunder listed: CASE No. 30-12-04714-00.  He claimed that he was dismissed from the service on
September 12, 2000 while Guillermo, Fernando, Ferdinand, and Miguel were orally
notified of their dismissal from the service on November 25, 2000.

NAME DATE EMPLOYED DAILY SALARY Petitioners denied respondents' allegations. As regards Gregorio, petitioners averred that
on September 15, 2000, he absented himself from work and applied as a painter with
SAEI-EEI which is the general building contractor of Pacific Plaza Towers.  Since then, he
never reported back to work.
1. Guillermo B. Biscocho Feb. 8, 1999 P  222.00
Guillermo absented himself from work without leave on November 27, 2000.  When he
reported for work the following day, he was reprimanded for being Absent Without

77
Official Leave (AWOL).  Because of the reprimand, he worked only half-day and thereafter 3,600.00 - Holiday Pay
was unheard of until the filing of the instant complaint.
P - Sub-Total
Fernando, Ferdinand, and Miguel were caught eating during working hours on November 15,806.25
25, 2000 for which they were reprimanded by their foreman. Since then they no longer
reported for work. + 1,580.87 - 10%Attorney's Fees

P Total
17,386.8
Ruling of the Labor Arbiter 6

On March 21, 2002, the Labor Arbiter rendered a Decision [10] exonerating petitioners
from the charge of illegal dismissal as respondents chose not to report for work.  The
Labor Arbiter ruled that since there is neither illegal dismissal nor abandonment of job, 2. Fernando Pereda
respondents should be reinstated but without any backwages.  She disallowed the claims
for premium pay for holidays and rest days and nightshift differential pay as respondents P 2,056.25 - Service Incentive Leave Pay
failed to prove that actual service was rendered on such non-working days.  However, she
allowed the claims for holiday pay, service incentive leave pay and 13 th month pay. The 10,692.50 - 13th Month Pay
dispositive portion of the Labor Arbiter's Decision reads:
3,525.00 - Holiday Pay

P - Sub-Total
16,273.75
WHEREFORE, premises considered, respondents Exodus International Construction
+ 1,627.37 - 10% Attorney's Fees

Corporation and/or Antonio Javalera are hereby ordered to reinstate complainants to P Total
17,901.1
their former positions as painters without loss of seniority rights and other benefits 2

appurtenant thereto without any backwages.

3. Miguel Bobillo

P 3,813.34 - 13th Month Pay

Respondents are likewise hereby ordered to pay complainants the following: 1,320.00 - Holiday Pay

1. Guillermo Biscocho P 5,133.34 - Sub-Total

P 1,968.75 - Service Incentive Leave Pay + 513.33 - 10% Attorney's Fees

10,237.50 - 13th Month Pay P Total

5,646.67

78
 or the total aggregate sum of Seventy Thousand, One Hundred Eighty Three and 23/100

(P70,183.23) Pesos, inclusive of the ten (10%) percent of the award herein by way of
4. Ferdinand Mariano

P 1,860.42 - Service Incentive Leave Pay attorney's fees, all within ten (10) days from receipt thereof;

9,674.19 - 13th Month Pay

3,055.00 - Holiday Pay The rest of complainants' claims for lack of merit are hereby Dismissed.

P - Sub-Total
14,589.61 SO ORDERED.[11]

+ 1,458.96 - 10% Attorney's Fees

Ruling of the National Labor Relations Commission
P Total
16,048.5 Petitioners sought recourse to the NLRC limiting their appeal to the award of service
7 incentive leave pay, 13th month pay, holiday pay and 10% attorney's fees in the sum of
P70,183.23.

On January 17, 2003, the NLRC dismissed the appeal. It ruled that petitioners, who have
5. Gregorio Bellita complete control over the records of the company, could have easily rebutted the
monetary claims against it.  All that it had to do was to present the vouchers showing
P 1,500.00 - Service Incentive Leave Pay payment of the same.  However, they opted not to lift a finger, giving an impression that
they never paid said benefits.
7,800.00 - 13th Month Pay
As to the award of attorney's fees, the NLRC found the same to be proper because
2,700.00 - Holiday Pay respondents were forced to litigate in order to validate their claim.

P - Sub-Total The NLRC thus affirmed the Decision of the Labor Arbiter, viz:
12,000.00
Accordingly, premises considered, the decision appealed from is hereby AFFIRMED and
+ 1,200.00 - 10% Attorney's Fees the appeal DISMISSED for lack of merit.

P Total SO ORDERED.[12]
13,200.0
0
Petitioners filed a Motion for Reconsideration [13] which was denied by the NLRC in a
Resolution[14] dated July 31, 2003.

Ruling of the Court of Appeals

79
Aggrieved, petitioners filed with the CA a petition for certiorari.  The CA through a
Resolution[15] dated October 22, 2003, directed the respondents to file their comment.  On
December 4, 2003, respondents filed their comment.[16]  On January 12, 2004, petitioners ordering the reinstatement of respondents to their former positions which were no
filed their reply.[17]
longer existing because its findings of facts are premised on misappreciation of facts.
On August 10, 2004, the CA dismissed the petition and affirmed the findings of the Labor
Arbiter and the NLRC.  It opined that in a situation where the employer has complete
control over the records and could thus easily rebut any monetary claims against it but
opted not to lift any finger, the burden is on the employer and not on the complainants.  II.
This is so because the latter are definitely not in a position to adduce any documentary
evidence, the control of which being not with them.
The Honorable Court of Appeals also seriously erred and committed grave abuse of
However, in addition to the reliefs awarded to respondents in the March 21, 2002
Decision of the Labor Arbiter which was affirmed by the NLRC in a Resolution dated discretion in affirming the award of service incentive leave pay, 13 th month pay, and
January 17, 2003, the petitioners were directed by the CA to solidarily pay full
backwages, inclusive of all benefits the respondents should have received had they not
been dismissed. holiday pay in the absence of evidentiary and legal basis therefor.

The dispositive portion of the CA Decision reads:

WHEREFORE, the instant petition for certiorari is dismissed.  However, in addition to the III.
reliefs awarded to private respondents in the decision dated March 21, 2002 of Labor
Arbiter Aldas and resolution of the NLRC dated January 17, 2003, the petitioners are The Honorable Court of Appeals likewise seriously erred and committed grave abuse of
directed to solidarily pay private respondents full backwages, inclusive of all benefits
they should have received had they not been dismissed, computed from the time their
wages were withheld until the time they are actually reinstated.  Such award of full discretion in affirming the award of attorney's fees even in the absence of counsel on
backwages shall be included in the computation of public respondents' award of ten
percent (10%) attorney's fees.
record to handle and prosecute the case.
SO ORDERED.[18]

IV.
Petitioners moved for reconsideration,[19] but to no avail.  Hence, this appeal anchored on
the following grounds:
The Honorable Court of Appeals also seriously erred and gravely abused its discretion in
Issues

holding individual petitioner solidarily liable with petitioner company without specific

I.
evidence on which the same was based.[20]

The Honorable Court of Appeals erred and committed grave abuse of discretion in
Petitioners' Arguments

Petitioners contend that, contrary to their allegations, respondents were never dismissed

80
from the service.  If respondents find themselves no longer in the service of petitioners, it particular circumstances.
is simply because of their refusal to report for work.  Further, granting that they were
dismissed, respondents' prolonged absences is tantamount to abandonment which is a In Machica v. Roosevelt Services Center, Inc.,[23] this Court sustained the employer's denial
valid ground for the termination of their employment.  As to respondents monetary as against the employees' categorical assertion of illegal dismissal.  In so ruling, this Court
claims, it is incumbent upon them to prove the same because the burden of proof rests on held that:
their shoulders.  But since respondents failed to prove the same, their claims should be
denied. The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were
burdened to prove their allegation that respondents dismissed them from their
Respondents' Arguments employment. It must be stressed that the evidence to prove this fact must be clear,
positive and convincing. The rule that the employer bears the burden of proof in illegal
Respondents, in support of their claim that they were illegally dismissed, argue that as dismissal cases finds no application here because the respondents deny having dismissed
painters, they performed activities which were necessary and desirable in the usual the petitioners.
business of petitioners, who are engaged in the business of contracting painting jobs. 
Hence, they are regular employees who, under the law, cannot just be dismissed from the
service without prior notice and without any just or valid cause.  According to the In this case, petitioners were able to show that they never dismissed respondents.  As to
respondents, they did not abandon their job.  For abandonment to serve as basis for a the case of Fernando, Miguel and Ferdinand, it was shown that on November 25, 2000, at
valid termination of their employment, it must first be established that there was a around 7:30 a.m., the petitioners' foreman, Wenifredo Lalap (Wenifredo) caught the three
deliberate and unjustified refusal on their part to resume work.  Mere absences are not still eating when they were supposed to be working already.  Wenifredo reprimanded
sufficient for these must be accompanied by overt acts pointing to the fact that they them and, apparently, they resented it so they no longer reported for work.  In the case of
simply do not want to work anymore.  Petitioners failed to prove this.  Furthermore, the Gregorio, he absented himself from work on September 15, 2000 to apply as a painter
filing of a complaint for illegal dismissal ably defeats the theory of abandonment of the with SAEI-EEI, the general contractor of Pacific Plaza Towers.  Since then he never
job. reported back to work.  Lastly, in the case of Guillermo, he absented himself without leave
on November 27, 2000, and so he was reprimanded when he reported for work the
following day.  Because of the reprimand, he did not report for work anymore.
Our Ruling Hence, as between respondents' general allegation of having been orally dismissed from
the service vis-a-vis those of petitioners which were found to be substantiated by the
sworn statement of foreman Wenifredo, we are persuaded by the latter.  Absent any
The petition is partly meritorious. showing of an overt or positive act proving that petitioners had dismissed respondents,
the latters' claim of illegal dismissal cannot be sustained.  Indeed, a cursory examination
"[T]his Court is not unmindful of the rule that in cases of illegal dismissal, the employer of the records reveal no illegal dismissal to speak of.
bears the burden of proof to prove that the termination was for a valid or authorized
cause."[21] But "[b]efore the [petitioners] must bear the burden of proving that the There was also no abandonment of work
dismissal was legal, [the respondents] must first establish by substantial evidence" that on the part of the respondents.
indeed they were dismissed.  "[I]f there is no dismissal, then there can be no question as
to the legality or illegality thereof."[22] The Labor Arbiter is also correct in ruling that there was no abandonment on the part of
respondents that would justify their dismissal from their employment.
There was no dismissal in this case,
hence, there is no question that can be It is a settled rule that "[m]ere absence or failure to report for work x x x is not enough to
entertained regarding its legality or amount to abandonment of work."[24] "Abandonment is the deliberate and unjustified
illegality. refusal of an employee to resume his employment."[25]

As found by the Labor Arbiter, there was no evidence that respondents were dismissed In Northwest Tourism Corporation v. Former Special 3rd Division of the Court of
nor were they prevented from returning to their work.  It was only respondents' Appeals[26] this Court held that "[t]o constitute abandonment of work, two elements must
unsubstantiated conclusion that they were dismissed.  As a matter of fact, respondents concur, [namely]:
could not name the particular person who effected their dismissal and under what

81
 Nonetheless, assuming that respondents were initially hired as project employees,
(1) the employee must have failed to report for work or must have been absent without petitioners must be reminded of our ruling in Maraguinot, Jr. v. National Labor Relations
valid or justifiable reason; and Commission[28] that "[a] project employee x x x may acquire the status of a regular
employee when the following [factors] concur:
(2) there must have been a clear intention on the part of the employee to sever the
employer-employee relationship manifested by some overt act." There is a continuous rehiring of project employees even after cessation of a
project; and

"It is the employer who has the burden of proof to show a deliberate and unjustified The tasks performed by the alleged "project employee" are vital, necessary and
refusal of the employee to resume his employment without any intention of indespensable to the usual business or trade of the employer."
returning."[27]  It is therefore incumbent upon petitioners to ascertain the respondents'
interest or non-interest in the continuance of their employment.  However, petitioners
failed to do so. In this case, the evidence on record shows that respondents were employed and assigned
continuously to the various projects of petitioners.  As painters, they performed activities
Respondents must be reinstated and paid which were necessary and desirable in the usual business of petitioners, who are engaged
their holiday pay, service incentive leave in subcontracting jobs for painting of residential units, condominium and commercial
pay, and 13th month pay. buildings. As regular employees, respondents are entitled to be reinstated without loss of
seniority rights.
Clearly therefore, there was no dismissal, much less illegal, and there was also no
abandonment of job to speak of.  The Labor Arbiter is therefore correct in ordering that Respondents are also entitled to their money claims such as the payment of holiday pay,
respondents be reinstated but without any backwages. service incentive leave pay, and 13th month pay.  Petitioners as the employer of
respondents and having complete control over the records of the company could have
However, petitioners are of the position that the reinstatement of respondents to their easily rebutted the monetary claims against it.  All that they had to do was to present the
former positions, which were no longer existing, is impossible, highly unfair and unjust.  vouchers or payrolls showing payment of the same.  However, they decided not to
The project was already completed by petitioners on September 28, 2001.  Thus the provide the said documentary evidence.  Our conclusion therefore is that they never paid
completion of the project left them with no more work to do.  Having completed their said benefits and therefore they must be ordered to settle their obligation with the
tasks, their positions automatically ceased to exist.  Consequently, there were no more respondents.
positions where they can be reinstated as painters.
Respondents are also entitled to the
Petitioners are misguided. They forgot that there are two types of employees in the payment of attorney's fees.
construction industry. The first is referred to as project employees or those employed in
connection with a particular construction project or phase thereof and such employment Even though respondents were not represented by counsel in most of the stages of the
is coterminous with each project or phase of the project to which they are assigned.  The proceedings of this case, the award of attorney's fees as ruled by the Labor Arbiter, the
second is known as non-project employees or those employed without reference to any NLRC and the CA to the respondents is still proper.  In Rutaquio v. National Labor
particular construction project or phase of a project. Relations Commission,[29] this Court held that:

The second category is where respondents are classified.  As such they are regular It is settled that in actions for recovery of wages or where an employee was forced to
employees of petitioners.  It is clear from the records of the case that when one project is litigate and, thus, incur expenses to protect his rights and interest, the award of attorney's
completed, respondents were automatically transferred to the next project awarded to fees is legally and morally justifiable.
petitioners. There was no employment agreement given to respondents which clearly
spelled out the duration of their employment, the specific work to be performed and that In Producers Bank of the Philippines v. Court of Appeals [30] this Court ruled that:
such is made clear to them at the time of hiring. It is now too late for petitioners to claim
that respondents are project employees whose employment is coterminous with each Attorney's fees may be awarded when a party is compelled to litigate or to incur expenses
project or phase of the project to which they are assigned. to protect his interest by reason of an unjustified act of the other party.

82
 that Javalera is solidarily liable with Exodus International Construction Corporation in
In this case, respondents filed a complaint for illegal dismissal with claim for payment of paying full backwages need not be discussed.
their holiday pay, service incentive leave pay, and 13 th month pay.  The Labor Arbiter, the
NLRC and the CA were one in ruling that petitioners did not pay the respondents their WHEREFORE, the instant petition for review on certiorari is PARTLY GRANTED.  The
holiday pay, service incentive leave pay, and 13th month pay as mandated by law.  For Decision of the Court of Appeals in CA-G.R. SP No. 79800 dated August 10, 2004,
sure, this unjustified act of petitioners had compelled the respondents to institute an is AFFIRMED with MODIFICATION that the award of full backwages isDELETED for lack
action primarily to protect their rights and interests. of legal basis.

The CA erred when it ordered SO ORDERED.

reinstatement of respondents with Corona, C.J., (Chairperson), Velasco, Jr., Nachura,* and  Perez, JJ., concur.
payment of full backwages.
It must be noted that the Labor Arbiter's disposition directed petitioners to reinstate
respondents without any backwages and awarded the payment of service incentive leave
pay, holiday pay, 13th month pay, and 10% attorney's fees in the sum of P70,183.23.

On appeal to the NLRC, petitioners limited their appeal to the award of service incentive
leave pay, holiday pay, 13th month pay, and 10% attorney's fees. No appeal was made on
the order of reinstatement.

In the proceedings before the CA, it is only the award of service incentive leave pay,
holiday pay, 13th month pay, and 10% attorney's fees that were raised by the petitioners. 
The CA in fact dismissed the petition.  However, the CA further concluded in its Decision
that since there is no abandonment to speak about, it is therefore indisputable that
respondents were illegally dismissed.  Therefore, they deserve not only reinstatement but
also the payment of full backwages.

We do not agree with this ruling of the CA.

In cases where there is no evidence of dismissal, the remedy is reinstatement but without
backwages.  In this case, both the Labor Arbiter and the NLRC made a finding that there
was no dismissal much less an illegal one.  "It is settled that factual findings of quasi-
judicial agencies are generally accorded respect and finality so long as these are
supported by substantial evidence."[31]

In Leonardo v. National Labor Relations Commission,[32] this Court held that:

In a case where the employee's failure to work was occasioned neither by his
abandonment nor by a termination, the burden of economic loss is not rightfully shifted
to the employer; each party must bear his own loss.

Thus, inasmuch as no finding of illegal dismissal had been made, and considering that the
absence of such finding is supported by the records of the case, this Court is bound by
such conclusion and cannot allow an award of the payment of backwages.

Lastly, since there was no need to award backwages to respondents, the ruling of the CA

83
 SECOND DIVISION
G.R. No. 169170, August 08, 2010
D.M. CONSUNJI, INC., PETITIONER, VS. ANTONIO GOBRES, MAGELLAN DALISAY,
GODOFREDO PARAGSA, EMILIO ALETA AND GENEROSO MELO, RESPONDENTS.

DECISION
PERALTA, J.:

This is a petition for review on certiorari[1] of the Decision of the Court of Appeals in CA-
G.R. SP No. 70708, dated March 9, 2005, and its Resolution, dated August 2, 2005, denying
petitioner's motion for reconsideration.

The facts are as follows:

Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta and
Generoso Melo worked as carpenters in the construction projects of  petitioner  D.M.
Consunji, Inc., a construction company,  on several occasions and/or at various times.
Their termination from employment for each project was reported to the Department of
Labor and Employment (DOLE), in accordance with Policy Instruction No. 20, which was
later superseded by Department Order No. 19, series of 1993.  Respondents' last
assignment was at Quad 4-Project in Glorietta, Ayala, Makati, where they started working
on September 1, 1998.  On October 14, 1998,  respondents saw their names  included in
the Notice of Termination posted on the bulletin board at the project premises.

Respondents filed a Complaint with the Arbitration Branch of the National Labor
Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and David M.
Consunji for illegal dismissal, and non-payment of 13th month pay, five (5) days service
incentive leave pay, damages and attorney's fees.

Petitioner D.M. Consunji, Inc. and David M. Consunji countered that respondents, being
project employees, are covered by Policy Instruction No. 20, as superseded by
Department Order No. 19, series of 1993 with respect to their separation or dismissal.
Respondents were employed per project undertaken by petitioner company and within
varying estimated periods indicated in their respective project employment contracts. 
Citing the employment record of each respondent, petitioner and David M. Consuji
averred that respondents' services were terminated when their phases of work for which
their services were engaged were completed or when the projects themselves were
completed. Respondents' notices of termination were filed with the DOLE, in compliance
with Policy Instruction No. 20,[2]  superseded by  Department Order No.19, series of 1993.
[3]
With respect to respondent Generoso G. Melo, petitioner and David M. Consuji
maintained the same positions they had against the case of Melo's co-complainants. [4]
Petitioner contended that since respondents were terminated by reason of the
completion of their respective phases of work in the construction project, their
termination was warranted and legal.[5]

84
Moreover,  petitioner  claimed  that respondents have been duly paid their service makes them project employees.  As could be gleaned from the last portion of Article 280
incentive leave pay and 13th month pay through their respective bank accounts, as of the Labor Code, the nature of employment of petitioners, which is fixed for a specific
evidenced by bank remittances.[6] project and the completion of which has been determined when they were hired, is
excepted therefrom.
Respondents replied that the Quad 4-Project at Glorietta, Ayala, Makati City was
estimated to take two years to finish, but they were dismissed within the two-year This is the reason why under Policy Instruction No. 20 and Department Order No. 19,
period.  They had no prior notice of their termination.  Hence, granting that they were series of 1993, employers of project employees are required to report their termination
project employees, they were still illegally dismissed for non-observance of procedural to DOLE upon completion of the project for which they were engaged. [12]
due process.[7]
The CA stated that although respondents were project employees, they were entitled to
On October 4, 1999, the Labor Arbiter rendered a Decision [8]  dismissing respondents' know the reason for their dismissal and to be heard on whatever claims they might have.
complaint. The Labor Arbiter found that respondents were project employees, that they It held that respondents' right to statutory due process was violated for lack of advance
were dismissed from the last project they were assigned to when their respective phases notice of their termination, even if they were validly terminated for having completed the
of work were completed, and that petitioner D.M. Consunji, Inc. and David M. Consunji phases of work for which they were hired. The appellate court stated that had
reported their termination of services to the DOLE in accordance with the requirements respondents been given prior notice, they would not have reported for work on October
of law. 14, 1998.  It cited Agabon v. NLRC,[13]  which  held that where the dismissal is for a just
cause, the lack of statutory due process should not nullify the dismissal, or render it
Respondents appealed the Labor Arbiter's Decision to the NLRC illegal, or ineffectual, but the employer should indemnify the employee for the violation of
his statutory rights by paying nominal damages. Hence, the Court of Appeals ordered
In a Resolution[9] dated July 31, 2001, the NLRC affirmed the decision of the Labor Arbiter, petitioner and David M. Consunji to pay respondents P20,000.00 each as nominal
and dismissed the appeal for lack of merit. damages for lack of advance notice of their termination.

Respondents' motion for reconsideration was denied by the NLRC for lack of merit in its Petitioner and David M. Consunji filed a partial motion for reconsideration and prayed
Order[10] dated February 21, 2002. that the Decision of the Court of Appeals be partially reconsidered by deleting the award
of nominal damages to each respondent. It pointed out that under Department Order No.
Respondents filed a petition for certiorari with the Court of Appeals, seeking the 19, series of 1993, which is the construction industry's governing law, there is no
annulment of the NLRC Resolution dated July 31, 2001 and Order dated February 21, provision  requiring administrative hearing/investigation before a project employee may
2002.  Respondents prayed that their dismissal be declared as illegal, and that they be be terminated on account of completion of phase of work or the project itself.  Petitioner
ordered reinstated to their former position with full backwages until actual also argued that prior notice of termination is not required in this case, and that  Agabon
reinstatement, and  awarded moral, exemplary and nominal damages. is not applicable  here,  because the termination in Agabon was  for cause, while herein
respondents were terminated due to the completion of the phases of work for which
On March 9, 2005, the Court of Appeals rendered a Decision, the dispositive portion of their  services were engaged.
which reads:
In a Resolution[14] dated August 2, 2005, the Court of Appeals denied  the  partial motion
WHEREFORE, the Decision and Resolution of the NLRC in finding petitioners' dismissal as for reconsideration. It held that the case of Agabon v. NLRC is the one controlling and in
valid are AFFIRMED with MODIFICATION that private respondents are ordered to pay point.  The appellate court stated that in Agabon, the Court ruled that even if the dismissal
each of the petitioners the sum of P20,000.00 as nominal damages for non-compliance is legal, the employer should still indemnify the employee for the violation of his
with the statutory due process. Costs against petitioners. [11] statutory rights. It added that no distinction was made in Agabon whether the employee
is engaged in a construction project or not.
The Court of Appeals sustained the findings of the NLRC that respondents are project
employees.  It held: Petitioner D.M. Consunji, Inc. filed this petition raising this question of law:

The Labor Arbiter and [the] NLRC correctly applied Article 280 of the Labor Code when it WHETHER OR NOT THERE IS BASIS FOR THE COURT OF APPEALS IN ORDERING
ruled that petitioners' employment, which is fixed for [a] specific project and the HEREIN PETITIONER TO PAY RESPONDENTS EACH THE SUM OF P20,000.00 AS
completion of which has been determined at the time that their services were engaged, NOMINAL DAMAGES FOR "ALLEGED" NON-COMPLIANCE WITH THE STATUTORY DUE

85
PROCESS.[15] The Court holds that Agabon v. NLRC is not applicable to this case, because it involved the
dismissal of regular employees for abandonment of work, which is a just cause for
Petitioner contends that the  award of nominal damages in the amount of P20,000.00 to dismissal under Article 282 of the Labor Code.[20] Although the dismissal was for a cause,
each respondent is unwarranted under Section 2 (III), Rule XXIII, Book V of the Omnibus the employer therein was required to observe the standard of due process for
Rules Implementing the Labor Code, which states, "If the termination is brought about by termination of employment based on just causes under Article 282 of the Labor Code,
the completion of the contract or phase thereof,  no prior notice is required."[16] which procedural due process requirements  are enumerated in  Section 2, Rule 1, Book
VI[21] of the Omnibus Rules Implementing the Labor Code. [22]  Since the employer therein
Petitioner also contends that  Agabon v. NLRC is not applicable to this case. The failed to comply with the twin requirements of notice and hearing,  the Court ordered the
termination therein was for just cause due to abandonment of work, while in this case, employer to pay the  employees involved nominal damages in the amount of P30,000.00
respondents were terminated due to the completion of the phases of work. for failure to observe procedural  due process.

In support of its argument, petitioner cited Cioco, Jr. v. C.E. Construction Corporation,[17] Unlike in Agabon,  respondents,  in this case, were not terminated for just cause under
which held: Article 282 of the Labor Code. Dismissal based on just causes contemplate acts or
omissions attributable to the employee. [23]  Instead, respondents were terminated due to
x x x More importantly, Section 2 (III), Rule XXIII, Book V of  the Omnibus Rules the completion of the phases of work for which their services were engaged.
Implementing the Labor Code provides that  no prior notice of termination is required if
the termination is brought about by completion of the contract or phase thereof for which As project employees, respondents' termination is governed by Section 1 (c) and Section
the worker has been engaged. This is because completion of the work or project 2 (III), Rule XXIII (Termination of Employment), Book V of the Omnibus Rules
automatically terminates the employment, in which case, the employer is, under the law, Implementing  the Labor Code.
only obliged to render a report to the DOLE on the termination of the employment. [18]
Section 1 (c), Rule XXIII, Book V of the  Omnibus Rules Implementing  the Labor Code
The petition is meritorious. states:

Respondents were found to be project employees by the Labor Arbiter, the NLRC and the Section 1.  Security of tenure. -- (a) In cases of regular employment, the employer shall not
Court of Appeals. Their unanimous finding that respondents are project employees is terminate the services of an employee except for just or authorized causes as provided by
binding on the Court. It must also be pointed out that respondents have not appealed law, and subject to the requirements of due process.
from such finding by the Court of Appeals.  It is only the petitioner that appealed from the
decision of the Court of Appeals. xxxx

The main  issue  is  whether or not respondents, as project employees, are entitled to (c) In cases of project employment or employment covered by legitimate contracting or
nominal damages for lack of advance notice of their dismissal. sub-contracting arrangements, no employee shall be dismissed prior to the completion of
the project or phase thereof for which the employee was engaged, or prior to the
A project employee is defined under Article 280 of the Labor Code as one whose expiration of the contract between the principal and contractor, unless the dismissal is
"employment has been fixed for a specific project or undertaking the completion or for just or authorized cause subject to the requirements of due process or prior notice, or
termination of which has been determined at the time of the engagement of the employee is brought about by the completion of the phase of the project or contract for which the
or where the work or services to be performed is seasonal in nature and the employment employee was engaged.[24]
is for the duration of the season." [19]
Records show that respondents were dismissed after the expiration of their respective
In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that project employment contracts, and due to the completion of the phases of work
respondents, as project employees, were validly terminated due to the  completion  of  respondents were engaged for. Hence, the cited provision's requirements of due process
the  phases of work for which their services were engaged.  However, the Court of or prior notice when an employee is  dismissed for just or authorized cause (under
Appeals held that respondents were entitled to nominal damages, because petitioner Articles 282 and 283 of the Labor Code)  prior  to the completion of the project or phase
failed to give them advance notice of their termination. The appellate court cited the case thereof for which the employee was engaged do not apply to  this case.
of Agabon v. NLRC as basis for the award of nominal damages.
Further, Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor

86
Code provides: termination is brought about by the completion of the contract or phase thereof for which
the employee was engaged.  Petitioner, therefore, did not violate any requirement of
Section 2. Standard of due process: requirements of notice. -- In all cases of termination of procedural due process by failing to give respondents advance notice of their
employment, the following standards of due process shall be substantially observed. termination; thus, there is no basis for the payment of nominal damages.

1. For termination of employment based on just causes as defined in Article 282 of the In sum, absent the requirement of prior notice of termination when  the termination is
Code: brought about by the completion of the contract or phase thereof for which the worker
was hired,  respondents are not entitled to nominal damages for lack of advance notice of
(a) A written notice served on the employee specifying the ground or grounds for their termination.
termination, and giving to said employee reasonable opportunity within which to explain
his side; WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R.
SP No. 70708, dated March 9, 2005, insofar as it upholds the validity of the dismissal of
(b) A hearing or conference during which the employee concerned, with the assistance of respondents is AFFIRMED, but the award of nominal damages to respondents is
counsel if the employee so desires, is given opportunity to respond to the charge, present DELETED. The  Resolution  of the Court of Appeals, dated August 2, 2005, is SET ASIDE.
his evidence or rebut the evidence presented against him; and
No costs.
(c) A written notice [of] termination served on the employee indicating that upon due
consideration of all the circumstance, grounds have been established to justify his SO ORDERED.
termination.
Carpio, (Chairperson), Nachura, Abad, and Mendoza, JJ. concur.
In case of termination, the foregoing notices shall be served on the employee's last known
address.

II. For termination of employment as based on authorized causes defined in Article 283 of
the Code, the requirements of due process shall be deemed complied with upon service of
a written notice to the employee and the appropriate Regional Office of the Department
at least thirty (30) days before the effectivity of the termination, specifying the ground or
grounds for termination.

III. If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required.  If the termination is brought about by the failure
of an employee to meet the standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served the employee within a
reasonable time from the effective date of termination. [25]

In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that
respondents were validly terminated due to the completion of the phases of work for
which  respondents' services  were engaged.  The  above rule clearly states, "If the
termination is brought about by the completion of the contract or phase thereof, no
prior notice is required."  Cioco, Jr. v. C.E. Construction Corporation[26] explained that this
is because completion of the work or project automatically terminates the employment,
in which case, the employer is, under the law, only obliged to render a report to the DOLE
on the termination of the employment.

 Hence, prior or advance notice of termination is not part of procedural due process if the

87
 Because of AMACC's action on the salary increases, the petitioners filed a complaint with
SECOND DIVISION the Arbitration Branch of the NLRC on July 25, 2000, for underpayment of wages, non-
G.R. No. 183572, April 13, 2010 payment of overtime and overload compensation, 13th month pay, and for discriminatory
YOLANDA M. MERCADO, CHARITO S. DE LEON, DIANA R. LACHICA, MARGARITO M. practices.[9]
ALBA, JR., AND FELIX A. TONOG, PETITIONERS, VS. AMA COMPUTER COLLEGE-
PARAÑAQUE CITY, INC., RESPONDENT. On September 7, 2000, the petitioners individually received a memorandum from
AMACC, through Human Resources Supervisor Mary Grace Beronia, informing them that
DECISION with the expiration of their contract to teach, their contract would no longer be renewed.
[10]
BRION, J.: The memorandum[11] entitled "Notice of Non-Renewal of Contract" states in full:

The petitioners - Yolanda M. Mercado (Mercado), Charito S. De Leon (De Leon), Diana R. In view of the expiration of your contract to teach with AMACC-Paranaque, We wish to
Lachica (Lachica), Margarito M. Alba, Jr. (Alba, Jr.,), and Felix A. Tonog (Tonog), all former inform you that your contract shall no longer be renewed effective Thirty (30) days upon
faculty members of AMA Computer College-Parañ aque City, Inc. (AMACC) - assail in this receipt of this notice. We therefore would like to thank you for your service and wish you
petition for review on certiorari [1] the Court of Appeals' (CA) decision of November 29, good luck as you pursue your career.

2007[2] and its resolution of June 20, 2008[3] that set aside the National Labor Relations You are hereby instructed to report to the HRD for further instruction. Please bear in
Commission's (NLRC) resolution dated July 18, 2005.[4] mind that as per company policy, you are required to accomplish your clearance and
turn-over all documents and accountabilities to your immediate superior.
THE FACTUAL ANTECEDENTS
For your information and guidance
The background facts are not disputed and are summarized below.
The petitioners amended their labor arbitration complaint to include the charge of illegal
AMACC is an educational institution engaged in computer-based education in the country. dismissal against AMACC. In their Position Paper, the petitioners claimed that their
One of AMACC's biggest schools in the country is its branch at Parañ aque City. The dismissal was illegal because it was made in retaliation for their complaint for monetary
petitioners were faculty members who started teaching at AMACC on May 25, 1998. The benefits and discriminatory practices against AMACC. The petitioners also contended that
petitioner Mercado was engaged as a Professor 3, while petitioner Tonog was engaged as AMACC failed to give them adequate notice; hence, their dismissal was ineffectual. [12]
an Assistant Professor 2. On the other hand, petitioners De Leon, Lachica and Alba, Jr.,
were all engaged as Instructor 1.[5] The petitioners executed individual Teacher's AMACC contended in response that the petitioners worked under a contracted term
Contracts for each of the trimesters that they were engaged to teach, with the following under a non-tenured appointment and were still within the three-year probationary
common stipulation:[6] period for teachers. Their contracts were not renewed for the following term because
they failed to pass the Performance Appraisal System for Teachers (PAST) while others
VII POSITION. The TEACHER has agreed to accept a non-tenured appointment to work in failed to comply with the other requirements for regularization, promotion, or increase in
the College of xxx effective xxx to xxx or for the duration of the last term that salary. This move, according to AMACC, was justified since the school has to maintain its
the TEACHER is given a teaching load based on the assignment duly high academic standards.[13]
approved by the DEAN/SAVP-COO. [Emphasis supplied]
The Labor Arbiter Ruling
For the school year 2000-2001, AMACC implemented new faculty screening guidelines,
set forth in its Guidelines on the Implementation of AMACC Faculty Plantilla. [7] Under the On March 15, 2002, Labor Arbiter (LA) Florentino R. Darlucio declared in his decision [14]
new screening guidelines, teachers were to be hired or maintained based on extensive that the petitioners had been illegally dismissed, and ordered AMACC to reinstate them to
teaching experience, capability, potential, high academic qualifications and research their former positions without loss of seniority rights and to pay them full backwages,
background. The performance standards under the new screening guidelines were also attorney's fees and 13th month pay. The LA ruled that Article 281 of the Labor Code on
used to determine the present faculty members' entitlement to salary increases. The probationary employment applied to the case; that AMACC allowed the petitioners to
petitioners failed to obtain a passing rating based on the performance standards; teach for the first semester of school year 2000-200; that AMACC did not specify who
hence AMACC did not give them any salary increase. [8] among the petitioners failed to pass the PAST and who among them did not comply with
the other requirements of regularization, promotions or increase in salary; and that the

88
petitioners' dismissal could not be sustained on the basis of AMACC's "vague and general
allegations" without substantial factual basis.[15] Significantly, the LA found no The CA noted that the petitioners had not completed three (3) consecutive years of
"discrimination in the adjustments for the salary rate of the faculty members based on the service (i.e. six regular semesters or nine consecutive trimesters of satisfactory service)
performance and other qualification which is an exercise of management prerogative."[16] and were still within their probationary period; their teaching stints only covered a
On this basis, the LA paid no heed to the claims for salary increases. period of two (2) years and three (3) months when AMACC decided not to renew their
contracts on September 7, 2000.
The NLRC Ruling
The CA effectively found reasonable basis for AMACC not to renew the petitioners'
On appeal, the NLRC in a Resolution dated July 18, 2005 [17] denied AMACC's appeal for contracts. To the CA, the petitioners were not actually dismissed; their respective
lack of merit and affirmed in toto the LA's ruling. The NLRC, however, observed that the contracts merely expired and were no longer renewed by AMACC because they failed to
applicable law is Section 92 of the Manual of Regulations for Private Schools (which satisfy the school's standards for the school year 2000-2001 that measured their fitness
mandates a probationary period of nine consecutive trimesters of satisfactory service for and aptitude to teach as regular faculty members. The CA emphasized that in the absence
academic personnel in the tertiary level where collegiate courses are offered on a of any evidence of bad faith on AMACC's part, the court would not disturb or nullify its
trimester basis), not Article 281 of the Labor Code (which prescribes a probationary discretion to set standards and to select for regularization only the teachers who qualify,
period of six months) as the LA ruled. Despite this observation, the NLRC affirmed the based on reasonable and non-discriminatory guidelines.
LA's finding of illegal dismissal since the petitioners were terminated on the basis of
standards that were only introduced near the end of their probationary period. The CA disagreed with the NLRC's ruling that the new guidelines for the school year
2000-20001 could not be imposed on the petitioners and their employment contracts.
The NLRC ruled that the new screening guidelines for the school year 2000-20001 cannot The appellate court opined that AMACC has the inherent right to upgrade the quality of
be imposed on the petitioners and their employment contracts since the new guidelines computer education it offers to the public; part of this pursuit is the implementation of
were not imposed when the petitioners were first employed in 1998. According to the continuing evaluation and screening of its faculty members for academic excellence. The
NLRC, the imposition of the new guidelines violates Section 6(d) of Rule I, Book VI of the CA noted that the nature of education AMACC offers demands that the school constantly
Implementing Rules of the Labor Code, which provides that "in all cases of probationary adopt progressive performance standards for its faculty to ensure that they keep pace
employment, the employer shall make known to the employee the standards under which with the rapid developments in the field of information technology.
he will qualify as a regular employee at the time of his engagement." Citing our ruling in
Orient Express Placement Philippines v. NLRC,[18] the NLRC stressed that the rudiments of Finally, the CA found that the petitioners were hired on a non-tenured basis and for a
due process demand that employees should be informed beforehand of the conditions of fixed and predetermined term based on the Teaching Contract exemplified by the
their employment as well as the basis for their advancement. contract between the petitioner Lachica and AMACC. The CA ruled that the non-renewal
of the petitioners' teaching contracts is sanctioned by the doctrine laid down in Brent
AMACC elevated the case to the CA via a petition for certiorari under Rule 65 of the Rules School, Inc. v. Zamora [20] where the Court recognized the validity of contracts providing
of Court. It charged that the NLRC committed grave abuse of discretion in: (1) ruling that for fixed-period employment.
the petitioners were illegally dismissed; (2) refusing to recognize and give effect to the
petitioner's valid term of employment; (3) ruling that AMACC cannot apply the THE PETITION
performance standards generally applicable to all faculty members; and (4) ordering the
petitioners' reinstatement and awarding them backwages and attorney's fees. The petitioners cite the following errors in the CA decision: [21]

The CA Ruling 1) The CA gravely erred in reversing the LA and NLRC illegal dismissal rulings; and
[19]
In a decision issued on November 29, 2007, the CA granted AMACC's petition for 2) The CA gravely erred in not ordering their reinstatement with full, backwages.
certiorari and dismissed the petitioners' complaint for illegal dismissal.
The petitioners submit that the CA should not have disturbed the findings of the LA and
The CA ruled that under the Manual for Regulations for Private Schools, a teaching the NLRC that they were illegally dismissed; instead, the CA should have accorded great
personnel in a private educational institution (1) must be a full time teacher; (2) must respect, if not finality, to the findings of these specialized bodies as these findings were
have rendered three consecutive years of service; and (3) such service must be supported by evidence on record. Citing our ruling in Soriano v. National Labor Relations
satisfactory before he or she can acquire permanent status. Commission,[22] the petitioners contend that in certiorari proceedings under Rule 65 of the

89
Rules of Court, the CA does not assess and weigh the sufficiency of evidence upon which not the conclusions are supported by substantial evidence whose absence points to grave
the Labor Arbiter and the NLRC based their conclusions. They submit that the CA erred abuse of discretion amounting to lack or excess of jurisdiction. [24] In the recent case of
when it substituted its judgment for that of the Labor Arbiter and the NLRC who were the Protacio v. Laya Mananghaya & Co.,[25] we emphasized that:
"triers of facts" who had the opportunity to review the evidence extensively.
As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the
On the merits, the petitioners argue that the applicable law on probationary employment, appellate court does not assess and weigh the sufficiency of evidence upon which the
as explained by the LA, is Article 281 of the Labor Code which mandates a period of six Labor Arbiter and the NLRC based their conclusion. The query in this proceeding is
(6) months as the maximum duration of the probationary period unless there is a limited to the determination of whether or not the NLRC acted without or in excess of its
stipulation to the contrary; that the CA should not have disturbed the LA's conclusion that jurisdiction or with grave abuse of discretion in rendering its decision. However, as an
the AMACC failed to support its allegation that they did not qualify under the new exception, the appellate court may examine and measure the factual findings of the
guidelines adopted for the school year 2000-2001; and that they were illegally dismissed; NLRC if the same are not supported by substantial evidence. The Court has not
their employment was terminated based on standards that were not made known to hesitated to affirm the appellate court's reversals of the decisions of labor
them at the time of their engagement. On the whole, the petitioners argue that the LA and tribunals if they are not supported by substantial evidence. [Emphasis supplied]
the NLRC committed no grave abuse of discretion that the CA can validly cite.
As discussed below, our review of the records and of the CA decision shows that the CA
THE CASE FOR THE RESPONDENT erred in recognizing that grave abuse of discretion attended the NLRC's conclusion that
the petitioners were illegally dismissed. Consistent with this conclusion, the evidence on
In their Comment,[23] AMACC notes that the petitioners raised no substantial argument in record show that AMACC failed to discharge its burden of proving by substantial evidence
support of their petition and that the CA correctly found that the petitioners were hired the just cause for the non-renewal of the petitioners' contracts.
on a non-tenured basis and for a fixed or predetermined term. AMACC stresses that the
CA was correct in concluding that no actual dismissal transpired; it simply did not renew In Montoya v. Transmed Manila Corporation,[26] we laid down our basic approach in the
the petitioners' respective employment contracts because of their poor performance and review of Rule 65 decisions of the CA in labor cases, as follows:
failure to satisfy the school's standards.
In a Rule 45 review, we consider the correctness of the assailed CA decision, in
AMACC also asserts that the petitioners knew very well that the applicable standards contrast with the review for jurisdictional error that we undertake under Rule 65.
would be revised and updated from time to time given the nature of the teaching Furthermore, Rule 45 limits us to the review of questions of law raised against the
profession. The petitioners also knew at the time of their engagement that they must assailed CA decision. In ruling for legal correctness, we have to view the CA decision in
comply with the school's regularization policies as stated in the Faculty Manual. the same context that the petition for certiorari it ruled upon was presented to it; we
Specifically, they must obtain a passing rating on the Performance Appraisal for have to examine the CA decision from the prism of whether it correctly determined
Teachers (PAST) - the primary instrument to measure the performance of faculty the presence or absence of grave abuse of discretion in the NLRC decision before it,
members. not on the basis of whether the NLRC decision on the merits of the case was correct.
In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a
Since the petitioners were not actually dismissed, AMACC submits that the CA correctly review on appeal, of the NLRC decision challenged before it. This is the approach that
ruled that they are not entitled to reinstatement, full backwages and attorney's fees. should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the
question to ask is: Did the CA correctly determine whether the NLRC committed
THE COURT'S RULING grave abuse of discretion in ruling on the case?

We find the petition meritorious. Following this approach, our task is to determine whether the CA correctly found that the
NLRC committed grave abuse of discretion in ruling that the petitioners were illegally
The CA's Review of Factual dismissed.
Findings under Rule 65
Legal Environment in the Employment of Teachers
We agree with the petitioners that, as a rule in certiorari proceedings under Rule 65 of
the Rules of Court, the CA does not assess and weigh each piece of evidence introduced in a. Rule on Employment on Probationary Status
the case. The CA only examines the factual findings of the NLRC to determine whether or

90
A reality we have to face in the consideration of employment on probationary status of on probation, he cannot automatically claim security of tenure and compel the
teaching personnel is that they are not governed purely by the Labor Code. The Labor employer to renew his employment contract. It is when the yearly contract is renewed
Code is supplemented with respect to the period of probation by special rules found in the for the third time that Section 93 of the Manual becomes operative, and the teacher then
Manual of Regulations for Private Schools. [27] On the matter of probationary period , is entitled to regular or permanent employment status.
Section 92 of these regulations provides:
It is important that the contract of probationary employment specify the period or term
Section 92. Probationary Period. - Subject in all instances to compliance with the of its effectivity. The failure to stipulate its precise duration could lead to the inference
Department and school requirements, the probationary period for academic personnel that the contract is binding for the full three-year probationary period.
shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory We have long settled the validity of a fixed-term contract in the case Brent School, Inc. v.
service for those in the tertiary level, and nine (9) consecutive trimesters of Zamora [29] that AMACC cited. Significantly, Brent happened in a school setting. Care
satisfactory service for those in the tertiary level where collegiate courses are should be taken, however, in reading Brent in the context of this case as Brent did not
offered on a trimester basis. [Emphasis supplied] involve any probationary employment issue; it dealt purely and simply with the validity
of a fixed-term employment under the terms of the Labor Code, then newly issued and
The CA pointed this out in its decision (as the NLRC also did), and we confirm the which does not expressly contain a provision on fixed-term employment.
correctness of this conclusion. Other than on the period, the following quoted portion of
Article 281 of the Labor Code still fully applies: c. Academic and Management Prerogative

x x x The services of an employee who has been engaged on a probationary basis may be Last but not the least factor in the academic world, is that a school enjoys academic
terminated for a just cause when he fails to qualify as a regular employee in accordance freedom - a guarantee that enjoys protection from the Constitution no less. Section 5(2)
with reasonable standards made known by the employer to the employee at the time of his Article XIV of the Constitution guarantees all institutions of higher learning academic
engagement . An employee who is allowed to work after a probationary period shall be freedom.[30]
considered a regular employee. [Emphasis supplied]
The institutional academic freedom includes the right of the school or college to decide
b. Fixed-period Employment and adopt its aims and objectives, and to determine how these objections can best be
attained, free from outside coercion or interference, save possibly when the overriding
The use of employment for fixed periods during the teachers' probationary period is public welfare calls for some restraint. The essential freedoms subsumed in the term
likewise an accepted practice in the teaching profession. We mentioned this in passing in "academic freedom" encompass the freedom of the school or college to determine for
Magis Young Achievers' Learning Center v. Adelaida P. Manalo, [28] albeit a case that itself: (1) who may teach; (2) who may be taught; (3) how lessons shall be taught; and (4)
involved elementary, not tertiary, education, and hence spoke of a school year rather than who may be admitted to study. [31]
a semester or a trimester. We noted in this case:
AMACC's right to academic freedom is particularly important in the present case, because
The common practice is for the employer and the teacher to enter into a contract, of the new screening guidelines for AMACC faculty put in place for the school year 2000-
effective for one school year. At the end of the school year, the employer has the option 2001. We agree with the CA that AMACC has the inherent right to establish high
not to renew the contract, particularly considering the teacher's performance. If the standards of competency and efficiency for its faculty members in order to achieve and
contract is not renewed, the employment relationship terminates. If the contract is maintain academic excellence. The school's prerogative to provide standards for its
renewed, usually for another school year, the probationary employment continues. Again, teachers and to determine whether or not these standards have been met is in
at the end of that period, the parties may opt to renew or not to renew the contract. If accordance with academic freedom that gives the educational institution the right to
renewed, this second renewal of the contract for another school year would then be the choose who should teach.[32] In Peña v. National Labor Relations Commission,[33] we
last year - since it would be the third school year - of probationary employment. At the emphasized:
end of this third year, the employer may now decide whether to extend a
permanent appointment to the employee, primarily on the basis of the employee It is the prerogative of the school to set high standards of efficiency for its teachers since
having met the reasonable standards of competence and efficiency set by the quality education is a mandate of the Constitution. As long as the standards fixed are
employer. For the entire duration of this three-year period, the teacher remains reasonable and not arbitrary, courts are not at liberty to set them aside. Schools cannot
under probation. Upon the expiration of his contract of employment, being simply be required to adopt standards which barely satisfy criteria set for government

91
recognition. under the Labor Code apply to probationary teachers, so that they may be the first to be
laid-off if the school does not have enough students for a given semester or trimester.
The same academic freedom grants the school the autonomy to decide for itself the terms Termination of employment on this basis is an authorized cause under the Labor Code. [41]
and conditions for hiring its teacher, subject of course to the overarching limitations
under the Labor Code. Academic freedom, too, is not the only legal basis for AMACC's Labor, for its part, is given the protection during the probationary period of knowing the
issuance of screening guidelines. The authority to hire is likewise covered and protected company standards the new hires have to meet during the probationary period, and to be
by its management prerogative - the right of an employer to regulate all aspects of judged on the basis of these standards, aside from the usual standards applicable to
employment, such as hiring, the freedom to prescribe work assignments, working employees after they achieve permanent status. Under the terms of the Labor Code, these
methods, process to be followed, regulation regarding transfer of employees, supervision standards should be made known to the teachers on probationary status at the start of
of their work, lay-off and discipline, and dismissal and recall of workers. [34] Thus, AMACC their probationary period, or at the very least under the circumstances of the present
has every right to determine for itself that it shall use fixed-term employment contracts case, at the start of the semester or the trimester during which the probationary
as its medium for hiring its teachers. It also acted within the terms of the Manual of standards are to be applied. Of critical importance in invoking a failure to meet the
Regulations for Private Schools when it recognized the petitioners to be merely on probationary standards, is that the school should show - as a matter of due process - how
probationary status up to a maximum of nine trimesters. these standards have been applied. This is effectively the second notice in a dismissal
situation that the law requires as a due process guarantee supporting the security of
The Conflict: Probationary Status tenure provision,[42] and is in furtherance, too, of the basic rule in employee dismissal that
and Fixed-term Employment the employer carries the burden of justifying a dismissal. [43] These rules ensure
compliance with the limited security of tenure guarantee the law extends to probationary
The existence of the term-to-term contracts covering the petitioners' employment is not employees.[44]
disputed, nor is it disputed that they were on probationary status - not permanent or
regular status - from the time they were employed on May 25, 1998 and until the When fixed-term employment is brought into play under the above probationary period
expiration of their Teaching Contracts on September 7, 2000. As the CA correctly found, rules, the situation - as in the present case - may at first blush look muddled as fixed-term
their teaching stints only covered a period of at least seven (7) consecutive trimesters or employment is in itself a valid employment mode under Philippine law and
two (2) years and three (3) months of service. This case, however, brings to the fore the jurisprudence.[45] The conflict, however, is more apparent than real when the respective
essential question of which, between the two factors affecting employment, should prevail nature of fixed-term employment and of employment on probationary status are closely
given AMACC's position that the teachers contracts expired and it had the right not to examined.
renew them . In other words, should the teachers' probationary status be disregarded
simply because the contracts were fixed-term? The fixed-term character of employment essentially refers to the period agreed upon
between the employer and the employee; employment exists only for the duration of the
The provision on employment on probationary status under the Labor Code [35] is a term and ends on its own when the term expires. In a sense, employment on
primary example of the fine balancing of interests between labor and management that probationary status also refers to a period because of the technical meaning "probation"
the Code has institutionalized pursuant to the underlying intent of the Constitution. [36] carries in Philippine labor law - a maximum period of six months, or in the academe, a
period of three years for those engaged in teaching jobs. Their similarity ends there,
On the one hand, employment on probationary status affords management the chance to however, because of the overriding meaning that being "on probation" connotes, i.e., a
fully scrutinize the true worth of hired personnel before the full force of the security of process of testing and observing the character or abilities of a person who is new to a role
tenure guarantee of the Constitution comes into play.[37] Based on the standards set at the or job.[46]
start of the probationary period, management is given the widest opportunity during the
probationary period to reject hirees who fail to meet its own adopted but reasonable Understood in the above sense, the essentially protective character of probationary status
standards.[38] These standards, together with the just [39] and authorized causes [40] for for management can readily be appreciated. But this same protective character gives rise
termination of employment the Labor Code expressly provides, are the grounds available to to the countervailing but equally protective rule that the probationary period can only
terminate the employment of a teacher on probationary status. For example, the school last for a specific maximum period and under reasonable, well-laid and properly
may impose reasonably stricter attendance or report compliance records on teachers on communicated standards. Otherwise stated, within the period of the probation, any
probation, and reject a probationary teacher for failing in this regard, although the same employer move based on the probationary standards and affecting the continuity of the
attendance or compliance record may not be required for a teacher already on employment must strictly conform to the probationary rules.
permanent status. At the same time, the same just and authorizes causes for dismissal

92
Under the given facts where the school year is divided into trimesters, the school academic standards.[47] The evidence is unclear on the exact terms of the standards,
apparently utilizes its fixed-term contracts as a convenient arrangement dictated by the although the school also admits that these were standards under the Guidelines on the
trimestral system and not because the workplace parties really intended to limit the Implementation of AMACC Faculty Plantilla put in place at the start of school year 2000-
period of their relationship to any fixed term and to finish this relationship at the end of 2001.
that term. If we pierce the veil, so to speak, of the parties' so-called fixed-term
employment contracts, what undeniably comes out at the core is a fixed-term contract While we can grant that the standards were duly communicated to the petitioners and
conveniently used by the school to define and regulate its relations with its teachers could be applied beginning the 1st trimester of the school year 2000-2001, glaring and
during their probationary period. very basic gaps in the school's evidence still exist. The exact terms of the standards were
never introduced as evidence; neither does the evidence show how these standards were
To be sure, nothing is illegitimate in defining the school-teacher relationship in this applied to the petitioners. [48] Without these pieces of evidence (effectively, the finding of
manner. The school, however, cannot forget that its system of fixed-term contract is a just cause for the non-renewal of the petitioners' contracts), we have nothing to consider
system that operates during the probationary period and for this reason is subject to the and pass upon as valid or invalid for each of the petitioners. Inevitably, the non-renewal
terms of Article 281 of the Labor Code. Unless this reconciliation is made, the requirements (or effectively, the termination of employment of employees on probationary status)
of this Article on probationary status would be fully negated as the school may freely choose lacks the supporting finding of just cause that the law requires and, hence, is illegal.
not to renew contracts simply because their terms have expired. The inevitable effect of
course is to wreck the scheme that the Constitution and the Labor Code established to In this light, the CA decision should be reversed. Thus, the LA's decision, affirmed as to
balance relationships between labor and management. the results by the NLRC, should stand as the decision to be enforced, appropriately re-
computed to consider the period of appeal and review of the case up to our level.
Given the clear constitutional and statutory intents, we cannot but conclude that in a
situation where the probationary status overlaps with a fixed-term contract not Given the period that has lapsed and the inevitable change of circumstances that must
specifically used for the fixed term it offers, Article 281 should assume primacy and the have taken place in the interim in the academic world and at AMACC, which changes
fixed-period character of the contract must give way. This conclusion is immeasurably inevitably affect current school operations, we hold that - in lieu of reinstatement - the
strengthened by the petitioners' and the AMACC's hardly concealed expectation that the petitioners should be paid separation pay computed on a trimestral basis from the time
employment on probation could lead to permanent status, and that the contracts are of separation from service up to the end of the complete trimester preceding the finality
renewable unless the petitioners fail to pass the school's standards. of this Decision.[49] The separation pay shall be in addition to the other awards, properly
recomputed, that the LA originally decreed.
To highlight what we mean by a fixed-term contract specifically used for the fixed term it
offers, a replacement teacher, for example, may be contracted for a period of one year to WHEREFORE, premises considered, we hereby GRANT the petition, and, consequently,
temporarily take the place of a permanent teacher on a one-year study leave. The REVERSE and SET ASIDE the Decision of the Court of Appeals dated November 29, 2007
expiration of the replacement teacher's contracted term, under the circumstances, leads and its Resolution dated June 20, 2008 in CA-G.R. SP No. 96599. The Labor Arbiter's
to no probationary status implications as she was never employed on probationary basis; decision of March 15, 2002, subsequently affirmed as to the results by the National Labor
her employment is for a specific purpose with particular focus on the term and with Relations Commission, stands and should be enforced with appropriate re-computation
every intent to end her teaching relationship with the school upon expiration of this term. to take into account the date of the finality of this Decision.

If the school were to apply the probationary standards (as in fact it says it did in the In lieu of reinstatement, AMA Computer College-Parañ aque City, Inc. is hereby DIRECTED
present case), these standards must not only be reasonable but must have also been to pay separation pay computed on a trimestral basis from the time of separation from
communicated to the teachers at the start of the probationary period, or at the very least, service up to the end of the complete trimester preceding the finality of this Decision. For
at the start of the period when they were to be applied. These terms, in addition to those greater certainty, the petitioners are entitled to:
expressly provided by the Labor Code, would serve as the just cause for the termination of
the probationary contract. As explained above, the details of this finding of just cause (a) backwages and 13th month pay computed from September 7, 2000 (the date AMA
must be communicated to the affected teachers as a matter of due process. Computer College-Parañ aque City, Inc. illegally dismissed the petitioners) up to the
finality of this Decision;
AMACC, by its submissions, admits that it did not renew the petitioners' contracts
because they failed to pass the Performance Appraisal System for Teachers (PAST) and (b) monthly honoraria (if applicable) computed from September 7, 2000 (the time of
other requirements for regularization that the school undertakes to maintain its high separation from service) up to the finality of this Decision; and

93
(c) separation pay on a trimestral basis from September 7, 2000 (the time of separation THIRD DIVISION
from service) up to the end of the complete trimester preceding the finality of this G.R. No. 199683, February 10, 2016
Decision. ARLENE T. SAMONTE, VLADIMIR P. SAMONTE, MA. AUREA S. ELEPANO,
PETITIONERS, VS. LA SALLE GREENHILLS, INC., BRO. BERNARD S. OCA,
The labor arbiter is hereby ORDERED to make another re-computation according to the RESPONDENTS.
above directives. No costs.
DECISION
SO ORDERED. PEREZ, J.:

Carpio, (Chairperson), Del Castillo, Perez, and Mendoza*, JJ., concur. As each and all of the various and varied classes of employees in the gamut of the labor
force, from non-professionals to professionals, are afforded full protection of law and
security of tenure as enshrined in the Constitution, the entitlement is determined on the
basis of the nature of the work, qualifications of the employee, and other relevant
circumstances.

Assailed in this petition for review on certiorari is the Decision[1] of the Court of Appeals
in C.A. G.R. SP No. 110391. affirming the Decision of the National Labor Relations
Commission (NLRC) in NLRC CA No. 044835-05[2] finding that petitioners Arlene T.
Samonte, Vladimir P. Samonte and Ma. Aurea S. Elepano were fixed-term employees of
respondent La Salle Greenhills, Inc. (LSGI). The NLRC (First Division) ruling is a
modification of the ruling of the Labor Arbiter that petitioners were independent
contractors of respondent LSGI.[3]

The facts are not in dispute.

From 1989, and for fifteen (15) years thereafter, LSGI contracted the services of medical
professionals, specifically pediatricians, dentists and a physician, to comprise its Health
Service Team (HST).

Petitioners, along with other members of the HST signed uniform one-page Contracts of
Retainer for the period of a specific academic calendar beginning in June of a certain year
(1989 and the succeeding 15 years) and terminating in March of the following year when
the school year ends. The Contracts of Retainer succinctly read, to wit:

CONTRACTOFRETAINER

Name of Retainer _________________________________________

Address_________________________________________________
Community Tax Cert. No.__________________________________
 Issued at_______________ on ____________________________
Taxpayer Identification No. (TIN)_________________
Department Assigned to________ HRD-CENTRO Operation___________
Project/Undertaking (Description and Duration)
____________ Health Services__________________

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Job Task (Description and Duration)
School [physician] from June 1, [x x x] to March 31, [x x x] In their Position Paper, petitioners alleged that they were regular employees who could
Rate__________________ only be dismissed for just and authorized causes, who, up to the time of their termination,
regularly received the following amounts:
Conditions:
1. Monthly salary for the ten-month period of a given school year:
1. This retainer is only temporary in character and, as above specified, shall be solely and
exclusively limited to the project/undertaking and/ or to the job/task assigned to the Name Monthly Salary
retainer within the said project/undertaking; a) Jennifer A. Ramirez Php 20,682.73
b) Brandon D. Ericta 28,603.62
2. This retainer shall, without need of any notice to the retainer, automatically cease on c) [Petitioner] Arlene T. Samonte 20,682.73
the aforespecified expiration date/s of the said project/undertaking and/or the said
d) [Petitioner] Vladimir P. Samonte 20,682.73
job/task; provided, that this retainer shall likewise be deemed terminated if the said
project/undertaking and/or fob/task shall be completed on a date/s priot to their e) Alma S. Resurrecion 12,700.83
aforespecified expiration date/s; f) Ma. Socorro A. Salazar 21,117.00
g) [Petitioner] Ma. Aurea S. Elepano 8,429.43
3. The foregoing notwithstanding, at any time prior to said expiration or completion
date/s, La Salle Greenhills, Inc. may upon prior written notice to the retainer, terminate 2. Annual 13th Month Pay equivalent to their one month salary;
this contract should the retainer fail in any way to perform his assigned job/task to the
satisfaction of La Salle Greenhills, Inc. or for any other just cause. 3. Automatic yearly increase to their monthly salary, the rate of which is discretionary to
LSGFs Executive Administrator based on a comparative rate to the across the board
HERMAN G. ROCHESTER                              _____________________ increase of the regular school employees which increase was subsequently reflected in
Head Administrator                                                       Retainer their [HST'S] monthly salaries for the following school year;

BELEN T. MASILUNGAN                                  _____________________ 4. Since 1996, as a result of the HST's request for a performance bonus, the team was
Personnel Officer                                                      Date Signed likewise evaluated for a year-end performance rating by HRD- CENTRO Head
Administrator, the Assistant Principal, the Health Services Team Leader and the
Signed in the Presence of: designated Physician's Coordinator, complainant Jennifer Ramirez.

DANTE M. FERRER                                               BRO. BERNARD S. OCA To further bolster their claim of regular employment, complainants pointed out the
FRD Head Administrator                                             President[4] following in their Position Paper:

After fifteen consecutive years of renewal each academic year, where the last Contract of In the course of their employment, each of the complainants served an average of nine
Retainer was for the school year of 2003-2004 i.e., June 1, 2003 to March 31, 2004, LSGI hours a week. But beyond their duty hours, they were on call for any medical exigencies
Head Administrator, Herman Rochester, on that last day of the school year, informed the of the La Sallian community. Furthermore, over the years, additional tasks were assigned
Medical Service Team, including herein petitioners, that their contracts will no longer be to the complainants and were required to suffer the following services/activites:
renewed for the following school year by reason of LSGI's decision to hire two (2) full-
time doctors and dentists. One of the physicians from the same Health Service Team was a) To attend staff meetings and to participate in the formulation/adoption of policies and
hired by LSGI as a full-time doctor. programs designed to enhance the School services to its constituents and to upgrade the
School's standards. Complainants' involvement in Staff Meetings of the Health Services
When petitioners', along with their medical colleagues', requests for Unit of respondent school was a regular activity associated with personnel who are
regular employees of an institution;
payment of their separation pay were denied, they filed a complaint for illegal dismissal
with prayer for separation pay, damages and attorney's fees before the NLRC. They b) To participate in various gatherings and activities sponsored by the respondent school
included the President of LSGI, Bro. Bernard S. Oca, as respondent. such as the Kabihasnan (the bi-annual school fair), symposiums, seminars, orientation
programs, workshops, lectures, etc., including purely political activities such as the

95
NAMFREL quick count, of which the respondent school is a staunch supporter; complainants were independent contractors and not regular employees citing, thus:

c) Participation of the complainants in Medical/Dental Missions in the name of SONZA contends that ABS-CBN exercised control over the means and methods of his
respondent school; work.

d) Formulation of the Health Services Unit Manual; SONZA's argument is misplaced. ABS-CBN engaged SONZA's services specifically to co-
host the "Mel & Jay" programs. ABS-CBN did not assign any other work to SONZA. To
e) Participation in the collation of evaluation of services rendered by the Health Services perform his work, SONZA only needed his skills and talent. How SONZA delivered his
Unit, as required for the continuing PAASCU (Philippine Association of Accredited Schools lines, appeared on television, and sounded on radio were outside ABS-CBN's control.
Colleges & Universities) accreditation of the School; SONZA did not have to render 8 hours of work per day. The Agreement required SONZA
to attend only rehearsals and tapings of the shows, as well as pre and post-production
f) Participation in the yearly evaluation of complainants, which is a staff meetings. ABS-CBN could not dictate the contents of SONZA's script. However, the
Agreement prohibited SONZA from criticising in his shows ABS-CBN or its interests. The
function of regular employees in the HRD-CENTRO Operations, of the HRD-CENTRO Head clear implication is that SONZA had a free hand on what to say or discuss in his shows
Administrator; provided he did not attack ABS-CBN or its interests.

g) Designation of certain complainants, particularly Dr. Jennifer A. Ramirez, as member of As previously adverted, the Labor Arbiter dismissed petitioners' (and their colleagues')
panel of investigation to inquire into an alleged misdemeanor of a regular employee of complaint and ruled that complainants, as propounded by LSGI, were independent
respondent school; and contractors under retainership contracts and never became regular employees of LSGI.
The Labor Arbiter based its over-all finding of the absence of control by LSGI over
h) Regular inspection of the canteen concessionaire and the toilet facilities of the school complainants on the following points:
premises to insure its high standards of sanitation.
1. The professional services provided by complainants, including herein petitioners,
Complainants were likewise included among so-called members of the "LA SALLIAN cannot be considered as necessary to LSGI's business of providing primary and secondary
FAMILY: Builder of a Culture of Peace," under the heading "Health Services Team" of the education to its students.
La Salle Green Hills High School Student Handbook 2003-2004. Such public presentation
of the complainants as members of the "LA SALLIAN FAMILY" leaves no doubt about the 2. The pay slips of complainants are not salaries but professional fees less taxes withheld
intent of respondent school to project complainants as part of its professional staff. [5] for the medical services they provided;

On the other hand, in their Position Paper,[6] LSGI denied that complainants were regular 3. Issuance of identification cards to, and the requirement to log the time-in and time-out
employees, asserting that complainants were independent contractors who were of, complainants are not indicia of LSGI's power of control over them but were only
retained by LSGI by reason of their medical skills and expertise to provide ancillary imposed for security reasons and in compliance with the agreed clinic schedules of
medical and dental services to both its students and faculty, consistent with the following complainants at LSGI premises.
circumstances:
4. In contrast to regular employees of LSGI, complainants: (a) were not required to attend
1. Complainants were professional physicians and dentists on retainer basis, paid on or participate in school-sponsored activities and (b) did not enjoy benefits such as
monthly retainer fees, not regular salaries; educational subsidy for their dependents.

2. LSGI had no power to impose disciplinary measures upon complainants including 5. On this score alone, complainants' respective clinic schedule at LSGI for two (2) to
dismissal from employment; three (3) days a week for three (3) hours a day, for a maximum of nine (9) hours a week,
was not commensurate to the required number of hours work rendered by a regular
3. LSGI had no power of control over how complainants actually performed their employee in a given week of at least 40 hours a week or 8 hours a day for five (5) days. In
professional services. addition, the appointed clinic schedule was based on the preference of complainants.

In the main, LSGI invoked the case of Sonza v. ABS-CBN[7] to justify its stance that Curiously, despite the finding that complainants were independent contractors and not

96
regular employees, the Labor Arbiter, on the ground of compassionate social justice, and under fixed terms and conditions and it is LSGI's prerogative to monitor their
awarded complainants separation pay at the rate of one-half month salary for every year performance to see if they are doing their tasks according to the terms and conditions of
of service: their contract and to give them incentives for good performance. [8]

Separately, both parties, complainants, including herein petitioners, and respondents Hence, this petition for review on certiorari raising the following issues for resolution of
appealed to the NLRC. the Court:

At the outset, the NLRC disagreed with the Labor Arbiter's ruling that complainants were VIII WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT
independent contractors based on the latter's opinion that the services rendered by PETITIONERS WERE FIXED-PERIOD EMPLOYEES AND NOT REGULAR
complainants are not considered necessary to LSGI's operation as an educational EMPLOYEES OF LSGI.
institution. The NLRC noted that Presidential Decree No. 856, otherwise known as the IX
Sanitation Code of the Philippines, requires that private educational institutions comply X WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED THAT
with the sanitary laws. Nonetheless, the NLRC found that complainants were fixed-period PETITIONERS WERE ILLEGALLY DISMISSED FROM WORK.
employees whose terms of employment were subject to agreement for a specific XI
duration. In all, the NLRC ruled that the Contracts of Retainer between complainants and XII WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED THAT
LSGI are valid fixed-term employment contracts where complainants as medical PETITIONERS ARE ENTITLED TO REINSTATEMENT, BACKWA'GES AND
professionals understood the terms thereof when they agreed to such continuously for OTHER MONETARY BENEFITS PROVIDED BY LAW, MORAL AND EXEMPLARY
more than ten (10) years. Consequently, the valid termination of their retainership DAMAGES, AS WELL AS ATTORNEY'S FEES.
contracts at the end of the period stated therein, did not entitle complainants to XIII
reinstatement, nor, to payment of separation pay. XIV WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED
THAT RESPONDENTS ARE SOLIDARILY LIABLE AS THEY ACTED IN BAD
At this point, only herein petitioners, filed a petition for certiorari under Rule 65 of the FAITH AND WITH MALICE IN DEALING WITH THE PETITIONERS. [9]
Rules of Court before the Court of Appeals alleging that grave abuse of discretion
attended the ruling of the NLRC that they were not regular employees and thus not The pivotal issue for resolution is whether the Court of Appeals correctly ruled that the
entitled to the twin remedies of reinstatement to work with payment of full backwages or NLRC did not commit grave abuse of discretion in ruling that petitioners were not regular
separation pay with backwages. employees who may only be dismissed for just and authorized causes.

In dismissing the petition for certiorari, the appellate court ruled that the NLRC did not Our inquiry and disposition will delve into the kind of employment relationship between
commit an error of jurisdiction which is correctible by a writ of certiorari. The Court of the parties, such employment relationship having been as much as admitted by LSGI and
Appeals found that the NLRC's ruling was based on the Contracts of Retainer signed by then ruled upon categorically by the NLRC and the appellate court which both held that
petitioners who, as professionals, supposedly ought to have known the import of the petitioners were fixed-term employees and not independent contractors.
contracts they voluntarily signed, i.e. (a) temporary in character; (b) automatically
ceasing on the specified expiration date, or (c) likewise deemed terminated if job/task Article 280 of the Labor Code classifies employees into regular, project, seasonal, and
shall be completed on a date prior to specified expiration date. casual:

The Court of Appeals ruled against petitioners' claim of regular employment, thus: Art. 280. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
Moreover, this Court is not persuaded by petitioners' averments that they are regular employment shall be deemed to be regular where the employee has been engaged to
employees simply because they received benefits such as overtime pay, allowances, perform activities which are usually necessary or desirable in the usual business or trade
Christmas bonuses and the like; or because they were subjected to administrative rules of the employer, except where the employment has been fixed for a specific project or
such as those that regulate their time and hours of work, or subjected to LSGFs undertaking the completion or termination of which has been determined at the time of
disciplinary rules and regulations; or simply because they were treated as part of LSGFs the engagement of the employee or where the . work or service to be performed is
professional staff. It must be emphasised that LSGI, being the employer, has the inherent seasonal in nature and the employment is for the duration of the season.
right to regulate all aspects of employment of every employee whether regular,
probationary, contractual or fixed-term. Besides, petitioners were hired for specific tasks An employment shall be deemed to be casual if it is not covered by the preceding

97
paragraph: Provided, That any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee xxx
with respect to the activity in which he is employed and his employment shall continue
while such activity exists. Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have been, as
already observed, to prevent circumvention of the employee's right to be secure in his
The provision classifies regular employees into two kinds (1) those "engaged to perform tenure, the clause in said article indiscriminately and completely ruling out all written or
activities which are usually necessary or desirable in the usual business or trade of the oral agreements conflicting with the concept of regular employment as defined therein
employer"; and (2) casual employees who have "rendered at least one year of service, should be construed to refer to the substantive evil that the Code itself has singled out:
whether such service is continuous or broken." agreements entered into precisely to circumvent security of tenure. It should have no
application to instances where a fixed period of employment was agreed upon knowingly
The NLRC correctly identified the existence of an employer-employee relationship and voluntarily by the parties, without any force, duress or improper pressure being
between petitioners and LSGI and not a bilateral independent contractor relationship. On brought to bear upon the employee and absent any other circumstances vitiating his
more than one occasion, we recognised certain workers to be independent contractors: consent, or where it satisfactorily appears that the employer and employee dealt with
individuals with unique skills and talents that set them apart from ordinary employees. [10] each other on more or less equal terms with no moral dominance whatever being
We found them to be independent contractors because of these unique skills and talents exercised by the former over the latter.
and the lack of control over the means and methods in the performance of their work. In
some instances, doctors and other medical professional may fall into this independent Tersely put, a fixed-term employment is allowable under the Labor Code only if the term
contractor category, legitimately providing medical professional services. However, as was voluntarily and knowingly entered into by the parties who must have dealt with each
has been declared by the-NLRC and the appellate court, petitioners herein are not other on equal terms not one exercising moral dominance over the other.
independent contractors.
Indeed, Price, et. al. v. Innodata Corp., teaches us, from the wording of Article 280 of the
We need to examine next the ruling of the NLRC and the Court of Appeals that petitioners Labor Code, that the nomenclature of contracts, especially employment contracts, does
were fixed-term employees. not define the employment status of a person: Such is defined and prescribed by law and
not by what the parties say it should be. Equally important to consider is that a contract
To factually support such conclusion, the NLRC solely relied on the case of Brent v. of employment is impressed with public interest such that labor contracts must yield to
Zamor[11] and perfunctorily noted that petitioners, professional doctors and dentists, the common good. Thus, provisions of applicable statutes are deemed written into the
continuously signed the contracts for more than ten (10) years. Such was heedless of our contract, and the parties are not at liberty to insulate themselves and their relationships
prescription that the ruling in Brent be strictly construed, applying only to cases where it from the impact of labor laws and regulations by simply contracting with each other.
appears that the employer and employee are on equal footing. Observably, nowhere in
the two and half page ratiocination of the NLRC was there reference to the standard that Further, a fixed-term contract is an employment contract, the repeated renewals of which
"it [should] satisfactorily appear that the employer and employee dealt with each other make for a regular employment. In Fuji Network Television v. Espiritu,[12] wenoted that
on more or less equal terms with no moral dominance whatever being exercised by the Fuji's argument that Espiritu was an independent contractor under a fixed-term contract
former on the latter." is contradictory where employees under fixed-term contracts cannot be independent
contractors because in fixed-term contracts, an employer-employee relationship exists.
From Brent, which remains as the exception rather than the rule in the determination of Significantly, we ruled therein that Espiritu's contract indicating a fixed term did not
the nature of employment, we are schooled that there are employment contracts where a automatically mean that she could never be a regular employee which is precisely what
"fixed term is an essential and natural appurtenance" such as overseas employment Article 280 of the Labor Code sought to avoid. The repeated renewal of Espiritu's contract
contracts and officers in educational institutions. We learned thus: coupled with the nature of work performed pointed to the regular nature of her
employment despite contrary claims of Fuji and the nomenclature of the contract. Citing
[T]he decisive determinant in the term employment contract should not be the activities Dumpit-Murillo v. Court of Appeals[13] and Philips Semiconductors, Inc. v. Fadriquela, [14] we
that the employee is called upon to perform, but the day certain agreed upon by the declared in Fuji that the repeated engagement under contract of hire is indicative of the
parties for the commencement and termination of their employment relationship, a day necessity and desirability of the [employee's] work in respondent's business and where
certain being understood to be "that which must necessarily come, although it may not be employee's contract has been continuously extended or renewed to the same position,
known when. with the same duties and remained in the employ without any interruption, then such

98
employee is a regular employee. pay and full back wages. We order separation pay in lieu of reinstatement given the time
that has lapsed, twelve years, in the litigation of this case.
In the case at bar, the Court of Appeals disregarded the repeated renewals of the
Contracts of Retainer of petitioners spanning a decade and a half. The Court of Appeals We clarify, however, that our ruling herein is only confined to the three (3) petitioners
ruled that petitioners never became regular employees: who had filed this appeal by certiorari under Rule 45 of theRules of Court, and prior
thereto, the petition for certiorari under Rule 65 thereof before the Court of Appeals. The
[T]his Court is not persuaded by petitioners' averments that they are regular employees Decision of the NLRC covering other complainants in NLRC CA No. 044835-05 has already
simply because they received benefits such as overtime pay, allowances, Christmas become final and executory as to them.
bonuses and the like; or because they were subjected to administrative rules such as
those that regulate their time and hours of work, or subjected to LSGl's disciplinary rules Not being trier of facts, we remand this case to the NLRC for the determination of
and regulations; or simply because they were treated as part of LSGLs professional staff. separation pay and full back wages from the time petitioners were precluded from
It must be emphasised that LSG1, as the employer, has the inherent right to regulate all returning to work the school year 2004 and compensation for work performed in that
aspects of employment of every employee whether regular, probationary, contractual or period.
fixed-term. Besides, petitioners were hired for specific tasks and under fixed terms and
conditions and it is LSGl's prerogative to monitor their performance to see if they are WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA G.R.
doing their tasks according to the terms and conditions of their contract and to give them SP No. 110391 is REVERSED AND SET ASIDE. The Decisions of the NLRC in NLRC CA No.
incentives for good performance.[15] 044835-05 and NLRC CASE No. 00-0607081-04 are ANNULLED AND SET ASIDE.  The
Complaint of petitioners Arlene T. Samonte, Vladimir P. Samonte, Ma. Carmen Aurea S.
We completely disagree with the Court of Appeals. Elepano against La Salle Greenhills, Inc. for illegal dismissal is GRANTED. We REMAND
this case to the NLRC for the computation of the three (3) petitioners' separation pay and
The uniform one-page Contracts of Retainer signed by petitioners were prepared by LSGI full back wages.
alone. Petitioners, medical professionals as they were, were still not on equal footing with
LSGI as they obviously did not want to lose their jobs that they had stayed in for fifteen No pronouncement as to costs.
(15) years. There is no specificity in the contracts regarding terms and conditions of
employment that would indicate that petitioners and LSGI were on equal footing in SO ORDERED.
negotiating it. Notably, without specifying what are the tasks assigned to petitioners, LSGI
"may upon prior written notice to the retainer, terminate [the] contract should the Velasco, (Chairperson), Peralta, Reyes and Jardeleza, JJ., concur.
retainer fail in any way to perform his assigned job/task to the satisfaction of La Salle
Greenhills, Inc. or for any other just cause." [16]

While vague in its sparseness, the Contract of Retainer very clearly spelled out that LSGI
had the power of control over petitioners.

Time and again we have held that the power of control refers to the existence of the
power and not necessarily to the actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of duties of the employee. [17] It is enough
that the employer has the right to wield that power.

In all, given the following: (1) repeated renewal of petitioners' contract for fifteen years,
interrupted only by the close of the school year; (2) the necessity of the work performed
by petitioners as school physicians and dentists; and (3) the existence of LSGI's power of
control over the means and method pursued by petitioners in the performance of their
job, we rule that petitioners attained regular employment, entitled to security of tenure
who could only be dismissed for just and authorized causes. Consequently, petitioners
were illegally dismissed and are entitled to the twin remedies of payment of separation

99
 SECOND DIVISION The LA also found petitioners guilty of bad faith when they treated respondent’s
G.R. No. 170388, September 04, 2013 termination merely as the expiration of the third employment contract and when they
COLEGIO DEL SANTISIMO ROSARIO AND SR. ZENAIDA S. MOFADA, OP, insisted that the school board actually deliberated on the non-renewal of respondent’s
PETITIONERS, VS. EMMANUEL ROJO,* RESPONDENT. employment without submitting admissible proof of his alleged regular performance
evaluation.[18]
DECISION
DEL CASTILLO, J.: The dispositive portion of the LA’s Decision [19] reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the
This Petition for Review on Certiorari[1] assails the August 31, 2005 Decision [2] and the [petitioners]:
November 10, 2005 Resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 85188,
which affirmed the July 31, 2003 Decision [4] of the National Labor Relations Commission 1. To pay [respondent] the total amount of P39,252.00 corresponding to his severance
(NLRC). Said NLRC Decision affirmed with modification the October 7, 2002 Decision [5] of compensation and 13th month pay, moral and exemplary damages.
the Labor Arbiter (LA) which, in turn, granted respondent Emmanuel Rojo’s (respondent)
Complaint[6] for illegal dismissal. 2. To pay 10% of the total amount due to [respondent] as attorney’s fees.

Factual Antecedents All other claims are dismissed for lack of merit.

Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher SO ORDERED.[20]
on probationary basis for the school years 1992-1993, 1993-1994 [7] and 1994-1995.[8] Ruling of the National Labor Relations Commission 

On April 5, 1995, CSR, through petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided not On appeal, the NLRC affirmed the LA’s Decision with modification. It held that after
to renew respondent’s services. [9] serving three school years, respondent had attained the status of regular employment [21]
especially because CSR did not make known to respondent the reasonable standards he
Thus, on July 13, 1995, respondent filed a Complaint [10] for illegal dismissal. He alleged should meet.[22] The NLRC also agreed with the LA that respondent’s termination was
that since he had served three consecutive school years which is the maximum number of done in bad faith. It held that respondent is entitled to reinstatement, if viable; or
terms allowed for probationary employment, he should be extended permanent separation pay, if reinstatement was no longer feasible, and backwages, viz:
employment. Citing paragraph 75 of the 1970 Manual of Regulations for Private Schools WHEREFORE, premises considered, the appealed Decision is hereby, AFFIRMED with
(1970 Manual), respondent asserted that “full- time teachers who have rendered three MODIFICATION only insofar as the award of separation pay is concerned. Since
(3) consecutive years of satisfactory services shall be considered permanent.” [11] [respondent] had been illegally dismissed, [petitioner] Colegio Del Santisimo Rosario is
hereby ordered to reinstate him to his former position without loss of seniority rights
On the other hand, petitioners argued that respondent knew that his Teacher’s Contract with full backwages until he is actually reinstated. However, if reinstatement is no longer
for school year 1994-1995 with CSR would expire on March 31, 1995. [12] Accordingly, feasible, the respondent shall pay separation pay, in [addition] to the payment of his full
respondent was not dismissed but his probationary contract merely expired and was not backwages.
renewed.[13] Petitioners also claimed that the “three years” mentioned in paragraph 75 of
the 1970 Manual refer to “36 months,” not three school years. [14] And since respondent The Computation Division is hereby directed to compute [respondent’s] full backwages to
served for only three school years of 10 months each or 30 months, then he had not yet be attached and to form part of this Decision.
served the “three years” or 36 months mentioned in paragraph 75 of the 1970 Manual. [15]
The rest of the appealed Decision stands.
Ruling of the Labor Arbiter
SO ORDERED.[23]
The LA ruled that “three school years” means three years of 10 months, not 12 months. [16] Petitioners moved for reconsideration which the NLRC denied in its April 28, 2004
Considering that respondent had already served for three consecutive school years, then Resolution[24] for lack of merit.
he has already attained regular employment status. Thus, the non-renewal of his contract
for school year 1995-1996 constitutes illegal dismissal. [17] Ruling of the Court of Appeals

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 THE PROBATIONARY PERIOD “SHALL BE MADE REGULAR OR PERMANENT IF
Petitioners filed a Petition for Certiorari[25] before the CA alleging grave abuse of ALLOWED TO WORK AFTER SUCH PROBATIONARY PERIOD.”[31]
discretion on the part of the NLRC in finding that respondent had attained the status of a Petitioners maintain that upon the expiration of the probationary period, both the school
regular employee and was illegally dismissed from employment. and the respondent were free to renew the contract or let it lapse. Petitioners insist that a
teacher hired for three consecutive years as a probationary employee does not
In a Decision[26] dated August 31, 2005, the CA denied the Petition for lack of merit. Citing automatically become a regular employee upon completion of his third year of probation.
Cagayan Capitol College v. National Labor Relations Commission,[27] it held that respondent It is the positive act of the school – the hiring of the teacher who has just completed three
has satisfied all the requirements necessary to acquire permanent employment and consecutive years of employment on probation for the next school year – that makes the
security of tenure viz: teacher a regular employee of the school.

1. The teacher is a full-time teacher; Our Ruling

2. The teacher must have rendered three (3) consecutive years of service; and We deny the Petition.

3. Such service must be satisfactory.[28] In Mercado v. AMA Computer College-Parañaque City, Inc.,[32] we had occasion to rule that
cases dealing with employment on probationary status of teaching personnel are not
According to the CA, respondent has attained the status of a regular employee after he governed solely by the Labor Code as the law is supplemented, with respect to the period
was employed for three consecutive school years as a full-time teacher and had served of probation, by special rules found in the Manual of Regulations for Private Schools (the
CSR satisfactorily. Aside from being a high school teacher, he was also the Prefect of Manual). With regard to the probationary period, Section 92 of the 1992 Manual[33]
Discipline, a task entailing much responsibility. The only reason given by Mofada for not provides:
renewing respondent’s contract was the alleged expiration of the contract, not any
unsatisfactory service. Also, there was no showing that CSR set performance standards Section 92. Probationary Period. – Subject in all instances to compliance with the
for the employment of respondent, which could be the basis of his satisfactory or Department and school requirements, the probationary period for academic
unsatisfactory performance. Hence, there being no reasonable standards made known to personnel shall not be more than three (3) consecutive years of satisfactory service
him at the time of his engagement, respondent was deemed a regular employee and was, for those in the elementary and secondary levels, six (6) consecutive regular
thus, declared illegally dismissed when his contract was not renewed. semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive
trimesters of satisfactory service for those in the tertiary level where collegiate courses
Petitioners moved for reconsideration. However, the CA denied the motion for lack of are offered on a trimester basis. (Emphasis supplied)
merit in its November 10, 2005 Resolution. [29]
In this case, petitioners’ teachers who were on probationary employment were made to
Hence, the instant Petition. Incidentally, on May 23, 2007, we issued a Resolution [30] enter into a contract effective for one school year. Thereafter, it may be renewed for
directing the parties to maintain the status quo pending the resolution of the present another school year, and the probationary employment continues. At the end of the
Petition. second fixed period of probationary employment, the contract may again be renewed for
Issue the last time.

WHETHER THE COURT OF APPEALS [AS WELL AS THE NATIONAL LABOR RELATIONS Such employment for fixed terms during the teachers’ probationary period is an accepted
COMMISSION] COMMITTED GRIEVOUS AND REVERSIBLE ERROR WHEN IT RULED THAT practice in the teaching profession. In Magis Young Achievers’ Learning Center v. Manalo,
[34]
A BASIC EDUCATION (ELEMENTARY) TEACHER HIRED FOR THREE (3) CONSECUTIVE we noted that:
SCHOOL YEARS AS A PROBATIONARY EMPLOYEE AUTOMATICALLY AND/OR BY LAW
BECOMES A PERMANENT EMPLOYEE UPON COMPLETION OF HIS THIRD YEAR OF The common practice is for the employer and the teacher to enter into a contract,
PROBATION NOTWITHSTANDING [A] THE PRONOUNCEMENT OF THIS HONORABLE effective for one school year. At the end of the school year, the employer has the option
COURT IN COLEGIO SAN AGUSTIN V. NLRC, 201 SCRA 398 [1991] THAT A not to renew the contract, particularly considering the teacher’s performance. If the
PROBATIONARY TEACHER ACQUIRES PERMANENT STATUS “ONLY WHEN HE IS contract is not renewed, the employment relationship terminates. If the contract is
ALLOWED TO WORK AFTER THE PROBATIONARY PERIOD” AND [B] DOLE-DECS-CHED- renewed, usually for another school year, the probationary employment continues. Again,
TESDA ORDER NO. 01, S. 1996 WHICH PROVIDE THAT TEACHERS WHO HAVE SERVED at the end of that period, the parties may opt to renew or not to renew the contract. If

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renewed, this second renewal of the contract for another school year would then be the also necessary that the employee be a full-time teacher, and that the services he rendered
last year – since it would be the third school year – of probationary employment. At the are satisfactory.”[38]
end of this third year, the employer may now decide whether to extend a
permanent appointment to the employee, primarily on the basis of the employee In Mercado, this Court, speaking through J. Brion, held that:
having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the teacher remains The provision on employment on probationary status under the Labor Code is a primary
under probation. Upon the expiration of his contract of employment, being simply on example of the fine balancing of interests between labor and management that the Code
probation, he cannot automatically claim security of tenure and compel the employer to has institutionalized pursuant to the underlying intent of the Constitution.
renew his employment contract. It is when the yearly contract is renewed for the third
time that Section 93 of the Manual becomes operative, and the teacher then is entitled to On the one hand, employment on probationary status affords management the chance to
regular or permanent employment status. (Emphases supplied) fully scrutinize the true worth of hired personnel before the full force of the security of
tenure guarantee of the Constitution comes into play. Based on the standards set at the
However, this scheme “of fixed-term contract is a system that operates during the start of the probationary period, management is given the widest opportunity during the
probationary period and for this reason is subject to Article 281 of the Labor Code,” [35] probationary period to reject hirees who fail to meet its own adopted but reasonable
which provides: standards. These standards, together with the just and authorized causes for termination of
employment [which] the Labor Code expressly provides, are the grounds available to
x x x The services of an employee who has been engaged on a probationary basis may be terminate the employment of a teacher on probationary status. x x x
terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at Labor, for its part, is given the protection during the probationary period of knowing the
the time of his engagement. An employee who is allowed to work after a probationary company standards the new hires have to meet during the probationary period, and to be
period shall be considered a regular employee. [Emphasis supplied] judged on the basis of these standards, aside from the usual standards applicable to
employees after they achieve permanent status. Under the terms of the Labor Code, these
In Mercado, we held that “[u]nless this reconciliation is made, the requirements of standards should be made known to the teachers on probationary status at the start of
[Article 281] on probationary status would be fully negated as the school may freely their probationary period, or at the very least under the circumstances of the present
choose not to renew contracts simply because their terms have expired.” [36] This will have case, at the start of the semester or the trimester during which the probationary
an unsettling effect in the equilibrium vis-a-vis the relations between labor and standards are to be applied. Of critical importance in invoking a failure to meet the
management that the Constitution and Labor Code have worked hard to establish. probationary standards, is that the school should show – as a matter of due process – how
these standards have been applied. This is effectively the second notice in a dismissal
That teachers on probationary employment also enjoy the protection afforded by Article situation that the law requires as a due process guarantee supporting the security of
281 of the Labor Code is supported by Section 93 of the 1992 Manual which provides: tenure provision, and is in furtherance, too, of the basic rule in employee dismissal that
the employer carries the burden of justifying a dismissal. These rules ensure compliance
Sec. 93. Regular or Permanent Status. - Those who have served the probationary period with the limited security of tenure guarantee the law extends to probationary employees.
shall be made regular or permanent. Full-time teachers who have satisfactorily
completed their probationary period shall be considered regular or permanent. When fixed-term employment is brought into play under the above probationary period
(Emphasis supplied) rules, the situation – as in the present case – may at first blush look muddled as fixed-
The above provision clearly provides that full-time teachers become regular or term employment is in itself a valid employment mode under Philippine law and
permanent employees once they have satisfactorily completed the probationary period of jurisprudence. The conflict, however, is more apparent than real when the respective
three school years.[37] The use of the term satisfactorily necessarily connotes the nature of fixed-term employment and of employment on probationary status are closely
requirement for schools to set reasonable standards to be followed by teachers on examined.
probationary employment. For how else can one determine if probationary teachers have
satisfactorily completed the probationary period if standards therefor are not provided? The fixed-term character of employment essentially refers to the period agreed upon
As such, “no vested right to a permanent appointment shall accrue until the employee has between the employer and the employee; employment exists only for the duration of the
completed the prerequisite three-year period necessary for the acquisition of a term and ends on its own when the term expires. In a sense, employment on
permanent status. [However, it must be emphasized that] mere rendition of service for probationary status also refers to a period because of the technical meaning “probation”
three consecutive years does not automatically ripen into a permanent appointment. It is carries in Philippine labor law – a maximum period of six months, or in the academe, a

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period of three years for those engaged in teaching jobs. Their similarity ends there, standards under which he will qualify as a regular employee at the time of his
however, because of the overriding meaning that being “on probation” connotes, i.e., a engagement. Where no standards are made known to the employee at that time, he shall
process of testing and observing the character or abilities of a person who is new to a role be deemed a regular employee.
or job.
In this case, glaringly absent from petitioners’ evidence are the reasonable standards that
Understood in the above sense, the essentially protective character of probationary status respondent was expected to meet that could have served as proper guidelines for
for management can readily be appreciated. But this same protective character gives rise purposes of evaluating his performance. Nowhere in the Teacher’s Contract [44] could such
to the countervailing but equally protective rule that the probationary period can only standards be found.[45] Neither was it mentioned that the same were ever conveyed to
last for a specific maximum period and under reasonable, well-laid and properly respondent. Even assuming that respondent failed to meet the standards set forth by CSR
communicated standards. Otherwise stated, within the period of the probation, any and made known to the former at the time he was engaged as a teacher on probationary
employer move based on the probationary standards and affecting the continuity of the status, still, the termination was flawed for failure to give the required notice to
employment must strictly conform to the probationary rules. respondent.[46] This is because Book VI, Rule I, Section 2 of the IRR of the Labor Code
provides:
x x x If we pierce the veil, so to speak, of the parties’ so-called fixed-term Section 2. Security of Tenure. – (a) In cases of regular employment, the employer shall not
employment contracts, what undeniably comes out at the core is a fixed-term terminate the services of an employee except for just or authorized causes as provided by
contract conveniently used by the school to define and regulate its relations with law, and subject to the requirements of due process.
its teachers during their probationary period.[39] (Emphasis supplied; italics in the
original) (b) The foregoing shall also apply in cases of probationary employment; provided,
In the same case, this Court has definitively pronounced that “in a situation where the however, that in such cases, termination of employment due to failure of the employee to
probationary status overlaps with a fixed-term contract not specifically used for the fixed qualify in accordance with the standards of the employer made known to the former at
term it offers, Article 281 should assume primacy and the fixed-period character of the the time of engagement may also be a ground for termination of employment.
contract must give way.”[40]
xxxx
An example given of a fixed-term contract specifically used for the fixed term it offers is a
replacement teacher or a reliever contracted for a period of one year to temporarily take (d) In all cases of termination of employment, the following standards of due process
the place of a permanent teacher who is on leave. The expiration of the reliever’s fixed- shall be substantially observed:
term contract does not have probationary status implications as he or she was never
employed on probationary basis. This is because his or her employment is for a specific xxxx
purpose with particular focus on the term. There exists an intent to end his or her
employment with the school upon expiration of this term.[41] If the termination is brought about by the completion of a contract or phase thereof, or
by failure of an employee to meet the standards of the employer in the case of
However, for teachers on probationary employment, in which case a fixed term probationary employment, it shall be sufficient that a written notice is served the
contract is not specifically used for the fixed term it offers, it is incumbent upon the employee, within a reasonable time from the effective date of termination.
school to have not only set reasonable standards to be followed by said teachers in (Emphasis supplied)
determining qualification for regular employment, the same must have also been Curiously, despite the absence of standards, Mofada mentioned the existence of alleged
communicated to the teachers at the start of the probationary period, or at the very performance evaluations[47] in respondent’s case. We are, however, in a quandary as to
least, at the start of the period when they were to be applied. These terms, in what could have been the basis of such evaluation, as no evidence were adduced to show
addition to those expressly provided by the Labor Code, would serve as the just cause for the reasonable standards with which respondent’s performance was to be assessed or
the termination of the probationary contract. The specific details of this finding of just that he was informed thereof. Notably too, none of the supposed performance evaluations
cause must be communicated to the affected teachers as a matter of due process. [42] were presented. These flaws violated respondent’s right to due process. As such, his
Corollarily, should the teachers not have been apprised of such reasonable dismissal is, for all intents and purposes, illegal.
standards at the time specified above, they shall be deemed regular employees.
As a matter of due process, teachers on probationary employment, just like all
In Tamson’s Enterprises, Inc. v. Court of Appeals,[43] we held that “[t]he law is clear that in probationary employees, have the right to know whether they have met the standards
all cases of probationary employment, the employer shall [convey] to the employee the against which their performance was evaluated. Should they fail, they also have the right

103
to know the reasons therefor.
FIRST DIVISION
It should be pointed out that absent any showing of unsatisfactory performance on the G.R. No. 193493, June 13, 2013
part of respondent, it can be presumed that his performance was satisfactory, especially JAIME N. GAPAYAO, PETITIONER, VS. ROSARIO FULO, SOCIAL SECURITY SYSTEM
taking into consideration the fact that even while he was still more than a year into his AND SOCIAL SECURITY COMMISSION, RESPONDENTS.
probationary employment, he was already designated Prefect of Discipline. In such
capacity, he was able to uncover the existence of a drug syndicate within the school and DECISION
lessen the incidence of drug use therein. Yet despite respondent’s substantial SERENO, C.J.:
contribution to the school, petitioners chose to disregard the same and instead
terminated his services; while most of those who were involved in drug activities within This is a Rule 45 Petition[1] assailing the Decision[2] and Resolution [3] of the Court of
the school were punished with a slap on the wrist as they were merely made to write Appeals (CA) in CA-G.R. SP. No. 101688, affirming the Resolution [4] of the Social Security
letters promising that the incident will not happen again.[48] Commission (SSC). The SSC held petitioner Jaime N. Gapayao liable to pay the unpaid
social security contributions due to the deceased Jaime Fulo, and the Social Security
Mofada would also have us believe that respondent chose to resign as he feared for his System (SSS) to pay private respondent Rosario L. Fulo, the widow of the deceased, the
life, thus, the school’s decision not to renew his contract. However, no resignation letter appropriate death benefits pursuant to the Social Security Law.
was presented. Besides, this is contrary to respondent’s act of immediately filing the
instant case against petitioners. The antecedent facts are as follows:

WHEREFORE, the Petition is hereby DENIED. The August 31, 2005 Decision and the On 4 November 1997, Jaime Fulo (deceased) died of “acute renal failure secondary to 1 st
November 10, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 85188 are degree burn 70% secondary electrocution” [5] while doing repairs at the residence and
AFFIRMED. The status quo order of this Court is LIFTED. business establishment of petitioner located at San Julian, Irosin, Sorsogon.

SO ORDERED. Allegedly moved by his Christian faith, petitioner extended some financial assistance to
private respondent. On 16 November 1997, the latter executed an Affidavit of
Carpio, (Chairperson), Brion, Perez, and Perlas-Bernabe, JJ., concur. Desistance[6] stating that she was not holding them liable for the death of her late
husband, Jaime Fulo, and was thereby waiving her right and desisting from filing any
criminal or civil action against petitioner.

On 14 January 1998, both parties executed a Compromise Agreement, [7] the relevant
portion of which is quoted below:

We, the undersigned unto this Honorable Regional Office/District Office/Provincial

Agency Office respectfully state:

1. The undersigned employer, hereby agrees to pay the sum of FORTY THOUSAND PESOS
(?40,000.00) to the surviving spouse of JAIME POLO, an employee who died of an
accident, as a complete and full payment for all claims due the victim.

2. On the other hand, the undersigned surviving spouse of the victim having received the
said amount do [sic] hereby release and discharge the employer from any and all claims
that maybe due the victim in connection with the victim’s employment thereat.

Thereafter, private respondent filed a claim for social security benefits with the Social
Security System (SSS)–Sorosogon Branch.[8] However, upon verification and evaluation, it
was discovered that the deceased was not a registered member of the SSS. [9]

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 arguendo that the deceased was petitioner’s employee, he was still not entitled to be paid
Upon the insistence of private respondent that her late husband had been employed by his SSS premiums for the intervening period when he was not at work, as he was an
petitioner from January 1983 up to his untimely death on 4 November 1997, the SSS “intermittent worker who [was] only summoned every now and then as the need
conducted a field investigation to clarify his status of employment. In its field [arose].”[15] Hence, petitioner insisted that he was under no obligation to report the
investigation report,[10] it enumerated its findings as follows: former’s demise to the SSS for social security coverage.

In connection with the complaint filed by Mrs. Rosario Fulo, hereunder are the findings Subsequently, on 30 June 2003, the SSS filed a Petition-in-Intervention [16] before the SSC,
per interview with Mr. Leonor Delgra, Santiago Bolanos and Amado Gacelo: outlining the factual circumstances of the case and praying that judgment be rendered
based on the evidence adduced by the parties.
That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm laborer from
1983 to 1997. On 14 March 2007, the SSC rendered a Resolution, [17] the dispositive portion of which
provides:
Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime Fulo.
WHEREFORE, PREMISES CONSIDERED, this Commission finds, and so holds, that Jaime
Mr. Jaime Fulo receives compensation on a daily basis ranging from ?5.00 to Fulo, the late husband of petitioner, was employed by respondent Jaime N. Gapayao from
P60.00 from 1983 to 1997. January 1983 to November 4, 1997, working for nine (9) months a year receiving the
minimum wage then prevailing.
Per interview from Mrs. Estela Gapayao, please be informed that:
Accordingly, the respondent is hereby ordered to pay P45,315.95 representing the
Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao on an extra basis. unpaid SS contributions due on behalf of deceased Jaime Fulo, the amount of P217,710.33
as 3% per month penalty for late remittance thereof, computed as of March 30, 2006,
Sometimes Jaime Fulo is allowed to work in the farm as abaca harvester and without prejudice to the collection of additional penalty accruing thereafter, and the sum
earn 1/3 share of its harvest as his income. of P230,542.20 (SSS) and P166,000.00 (EC) as damages for the failure of the respondent
to report the deceased Jaime Fulo for SS coverage prior to his death pursuant to Section
Mr. & Mrs. Gapayao hired the services of Jaime Fulo not only in the farm as well 24(a) of the SS Law, as amended.
as in doing house repairs whenever it is available. Mr. Fulo receives his
remuneration usually in the afternoon after doing his job. The SSS is hereby directed to pay petitioner Rosario Fulo the appropriate death benefit,
pursuant to Section 13 of the SS Law, as amended, as well as its prevailing rules and
Mr. & Mrs. Gapayao hires 50-100 persons when necessary to work in their regulations, and to inform this Commission of its compliance herewith.
farm as laborer and Jaime Fulo is one of them. Jaime Fulo receives more or less
P50.00 a day. (Emphases in the original) SO ORDERED.

Consequently, the SSS demanded that petitioner remit the social security contributions of On 18 May 2007, petitioner filed a Motion for Reconsideration, [18] which was denied in an
the deceased. When petitioner denied that the deceased was his employee, the SSS Order[19] dated 16 August 2007.
required private respondent to present documentary and testimonial evidence to refute
petitioner’s allegations. [11] Aggrieved, petitioner appealed to the CA on 19 December 2007. [20] On 17 March 2010, the
CA rendered a Decision[21] in favor of private respondent, as follows:
Instead of presenting evidence, private respondent filed a Petition [12] before the SSC on 17 In fine, public respondent SSC had sufficient basis in concluding that private respondent’s
February 2003. In her Petition, she sought social security coverage and payment of husband was an employee of petitioner and should, therefore, be entitled to compulsory
contributions in order to avail herself of the benefits accruing from the death of her coverage under the Social Security Law.
husband.
Having ruled in favor of the existence of employer-employee relationship between
On 6 May 2003, petitioner filed an Answer[13] disclaiming any liability on the premise that petitioner and the late Jaime Fulo, it is no longer necessary to dwell on the other issues
the deceased was not the former’s employee, but was rather an independent contractor raised.
whose tasks were not subject to petitioner’s control and supervision. [14] Assuming

105
Resultantly, for his failure to report Jaime Fulo for compulsory social security coverage, petitioner was a clear indication of the necessity and indispensability of her late
petitioner should bear the consequences thereof. Under the law, an employer who fails to husband’s services to petitioner’s business.” [32] This view is bolstered by the admission of
report his employee for social security coverage is liable to [1] pay the benefits of those petitioner himself in the Compromise Agreement that he was the deceased’s employer. [33]
who die, become disabled, get sick or reach retirement age; [2] pay all unpaid
contributions plus a penalty of three percent per month; and [3] be held liable for a Private respondent’s position is similarly espoused by the SSC, which contends that its
criminal offense punishable by fine and/or imprisonment. But an employee is still findings are duly supported by evidence on record.[34] It insists that pakyaw workers are
entitled to social security benefits even is (sic) his employer fails or refuses to remit his considered employees, as long as the employer exercises control over them. In this case,
contribution to the SSS. the exercise of control by the employer was delegated to the caretaker of his farm, Amado
Gacelo. The SSC further asserts that the deceased rendered services essential for the
WHEREFORE, premises considered, the Resolution appealed from is AFFIRMED in toto. petitioner’s harvest. While these services were not rendered continuously (in the sense
that they were not rendered every day throughout the year), still, the deceased had never
SO ORDERED. stopped working for petitioner from year to year until the day the former died. [35] In fact,
the deceased was required to work in the other business ventures of petitioner, such as
In holding thus, the CA gave credence to the findings of the SSC. The appellate court held the latter’s bakery and grocery store.[36] The Compromise Agreement entered into by
that it “does not follow that a person who does not observe normal hours of work cannot petitioner with private respondent should not be a bar to an employee demanding what
be deemed an employee.”[22] For one, it is not essential for the employer to actually is legally due the latter.[37]
supervise the performance of duties of the employee; it is sufficient that the former has a
right to wield the power. In this case, petitioner exercised his control through an overseer The SSS, while clarifying that it is “neither adversarial nor favoring any of the private
in the person of Amado Gacelo, the tenant on petitioner’s land. [23] Most important, parties x x x as it is only tasked to carry out the purposes of the Social Security Law,” [38]
petitioner entered into a Compromise Agreement with private respondent and expressly agrees with both private respondent and SSC. It stresses that factual findings of the lower
admitted therein that he was the employer of the deceased. [24] The CA interpreted this courts, when affirmed by the appellate court, are generally conclusive and binding upon
admission as a declaration against interest, pursuant to Section 26, Rule 130 of the Rules the Court.[39]
of Court.[25]
Petitioner, on the other hand, insists that the deceased was not his employee. Supposedly,
Hence, this petition. the latter, during the performance of his function, was not under petitioner’s control.
Control is not necessarily present even if the worker works inside the premises of the
Public respondents SSS[26] and SSC[27] filed their Comments on  31 January 2011 and 28 person who has engaged his services. [40] Granting without admitting that petitioner gave
February 2011, respectively, while private respondent filed her Comment on 14 March rules or guidelines to the deceased in the process of the latter’s performing his work, the
2011.[28] On 6 March 2012, petitioner filed a “Consolidated Reply to the Comments of the situation cannot be interpreted as control, because it was only intended to promote
Public Respondents SSS and SSC and Private Respondent Rosario Fulo.” [29] mutually desired results.[41]

ISSUE Alternatively, petitioner insists that the deceased was hired by Adolfo Gamba, the
contractor whom he had hired to construct their building;[42] and by Amado Gacelo, the
The sole issue presented before us is whether or not there exists between the deceased tenant whom petitioner instructed to manage the latter’s farm. [43] For this reason,
Jaime Fulo and petitioner an employer-employee relationship that would merit an award petitioner believes that a tenant is not beholden to the landlord and is not under the
of benefits in favor of private respondent under social security laws. latter’s control and supervision. So if a worker is hired to work on the land of a tenant –
such as petitioner – the former cannot be the worker of the landlord, but of the tenant’s.
[44]
THE COURT’S RULING

In asserting the existence of an employer-employee relationship, private respondent Anent the Compromise Agreement, petitioner clarifies that it was executed to buy peace,
alleges that her late husband had been in the employ of petitioner for 14 years, from 1983 because “respondent kept on pestering them by asking for money.” [45] Petitioner allegedly
to 1997.[30] During that period, he was made to work as a laborer in the agricultural received threats that if the matter was not settled, private respondent would refer the
landholdings, a harvester in the abaca plantation, and a repairman/utility worker in matter to the New Peoples’ Army.[46]  Allegedly, the Compromise Agreement was
several business establishments owned by petitioner.[31] To private respondent, the “extortion camouflaged as an agreement.” [47] Likewise, petitioner maintains that he
“considerable length of time during which [the deceased] was given diverse tasks by shouldered the hospitalization and burial expenses of the deceased to express his

106
“compassion and sympathy to a distressed person and his family,” and not to admit while such actually exists.
liability.[48]
Jurisprudence has identified the three types of employees mentioned in the provision: (1)
Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on regular employees or those who have been engaged to perform activities that are usually
a pakyaw basis and worked for a short period of time, in the nature of a farm worker necessary or desirable in the usual business or trade of the employer; (2) project
every season, he was not precluded from working with other persons and in fact worked employees or those whose employment has been fixed for a specific project or
for them. Under Article 280 of the Labor Code,[49] seasonal employees are not covered by undertaking, the completion or termination of which has been determined at the time of
the definitions of regular and casual employees. [50] Petitioner cites Mercado, Sr. v. NLRC,[51] their engagement, or those whose work or service is seasonal in nature and is performed
in which the Court held that seasonal workers do not become regular employees by the for the duration of the season; and (3) casual employees or those who are neither regular
mere fact that they have rendered at least one year of service, whether continuous or nor project employees.[55]
broken.[52]
Farm workers generally fall under the definition of seasonal employees. We have
We see no cogent reason to reverse the CA. consistently held that seasonal employees may be considered as regular employees. [56]
Regular seasonal employees are those called to work from time to time. The nature of
I their relationship with the employer is such that during the off season, they are
temporarily laid off; but reemployed during the summer season or when their services
Findings of fact of the SSC may be needed.[57] They are in regular employment because of the nature of their job, and
are given weight and credence. not because of the length of time they have worked. [58]

At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence The rule, however, is not absolute. In Hacienda Fatima v. National Federation of
all over again. Findings of fact of administrative agencies and quasi-judicial bodies, which Sugarcane Workers-Food & General Trade,[59] the Court held that seasonal workers who
have acquired expertise because their jurisdiction is confined to specific matters, are have worked for one season only may not be considered regular employees. Similarly, in
generally accorded not only respect but finality when affirmed by the CA. [53] For as long as Mercado, Sr. v. NLRC,[60] it was held that when seasonal employees are free to contract
these findings are supported by substantial evidence, they must be upheld. [54] their services with other farm owners, then the former are not regular employees.

II For regular employees to be considered as such, the primary standard used is the
reasonable connection between the particular activity they perform and the usual trade
Farm workers may be considered or business of the employer.[61] This test has been explained thoroughly in De Leon v.
regular seasonal employees. NLRC,[62] viz:

Article 280 of the Labor Code states: The primary standard, therefore, of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the
Article 280. Regular and Casual Employment. — The provisions of written agreement to usual business or trade of the employer.  The test is whether the former is usually
the contrary notwithstanding and regardless of the oral agreement of the parties, an necessary or desirable in the usual business or trade of the employer.  The connection can
employment shall be deemed to be regular where the employee has been engaged to be determined by considering the nature of the work performed and its relation to the
perform activities which are usually necessary or desirable in the usual business or trade scheme of the particular business or trade in its entirety.  Also if the employee has been
of the employer, except where the employment has been fixed for a specific project or performing the job for at least one year, even if the performance is not continuous or
undertaking the completion or termination of which has been determined at the time of merely intermittent, the law deems the repeated and continuing need for its performance
the engagement of the employee or where the work or services to be performed is as sufficient evidence of the necessity if not indispensability of that activity to the
seasonal in nature and the employment is for the duration of the season. business.  Hence, the employment is also considered regular, but only with respect to
such activity and while such activity exists.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service A reading of the records reveals that the deceased was indeed a farm worker who was in
whether such service is continuous or broken, shall be considered a regular employee the regular employ of petitioner. From year to year, starting January 1983 up until his
with respect to the activity in which he is employed and his employment shall continue death, the deceased had been working on petitioner’s land by harvesting abaca and

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coconut, processing copra, and clearing weeds. His employment was continuous in the his work inside petitioner’s farm or not because petitioner retained the right to control
sense that it was done for more than one harvesting season. Moreover, no amount of him in his work, and in fact exercised it through his farm manager Amado Gacelo. The
reasoning could detract from the fact that these tasks were necessary or desirable in the latter himself testified that petitioner had hired the deceased as one of the pakyaw
usual business of petitioner. workers whose salaries were derived from the gross proceeds of the harvest. [71]

The other tasks allegedly done by the deceased outside his usual farm work only bolster We do not give credence to the allegation that the deceased was an independent
the existence of an employer-employee relationship. As found by the SSC, the deceased contractor hired by a certain Adolfo Gamba, the contractor whom petitioner himself had
was a construction worker in the building and a helper in the bakery, grocery, hardware, hired to build a building. The allegation was based on the self-serving testimony of Joyce
and piggery – all owned by petitioner.[63] This fact only proves that even during the off Gapay Demate,[72] the daughter of petitioner. The latter has not offered any other proof
season, the deceased was still in the employ of petitioner. apart from her testimony to prove the contention.

The most telling indicia of this relationship is the Compromise Agreement executed by The right of an employee to be covered by the Social Security Act is premised on the
petitioner and private respondent. It is a valid agreement as long as the consideration is existence of an employer-employee relationship. [73] That having been established, the
reasonable and the employee signed the waiver voluntarily, with a full understanding of Court hereby rules in favor of private respondent.
what he or she was entering into.[64] All that is required for the compromise to be deemed
voluntarily entered into is personal and specific individual consent. [65] Once executed by WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed
the workers or employees and their employers to settle their differences, and done in Decision and Resolution of the Court of Appeals in CA-G.R. SP. No. 101688 dated 17
good faith, a Compromise Agreement is deemed valid and binding among the parties. [66] March 2010 and 13 August 2010, respectively, are hereby AFFIRMED.

Petitioner entered into the agreement with full knowledge that he was described as the SO ORDERED.
employer of the deceased. [67] This knowledge cannot simply be denied by a statement that
petitioner was merely forced or threatened into such an agreement. His belated attempt Leonardo-De Castro, Bersamin, Villarama, Jr., and Reyes, JJ., concur.
to circumvent the agreement should not be given any consideration or weight by this
Court.

III

Pakyaw workers are regular employees,

provided they are subject to the control of petitioner.

Pakyaw workers are considered employees for as long as their employers exercise
control over them. In Legend Hotel Manila v. Realuyo,[68] the Court held that “the power of
the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This is the so-called
control test and is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used to
achieve that end.” It should be remembered that the control test merely calls for the
existence of the right to control, and not necessarily the exercise thereof. [69] It is not
essential that the employer actually supervises the performance of duties by the
employee. It is enough that the former has a right to wield the power. [70]

In this case, we agree with the CA that petitioner wielded control over the deceased in the
discharge of his functions. Being the owner of the farm on which the latter worked,
petitioner – on his own or through his overseer – necessarily had the right to review the
quality of work produced by his laborers. It matters not whether the deceased conducted

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 directly related to the latter’s main operations.  As the complainants were project
SECOND DIVISION employees, they could not be regularized since their respective employments were
G.R. No. 186439, January 15, 2014 coterminous with the phase of the work or special project to which they were assigned
UNIVERSAL ROBINA SUGAR MILLING CORPORATION AND RENE CABATI, and which employments end upon the completion of each project.  Accordingly, the
PETITIONERS, VS. FERDINAND ACIBO, ROBERTO AGUILAR, EDDIE BALDOZA, RENE complainants were not entitled to the benefits granted under the CBA that, as provided,
ABELLAR, DIOMEDES ALICOS, MIGUEL ALICOS, ROGELIO AMAHIT, LARRY AMASCO, covered only the regular employees of URSUMCO.
FELIPE BALANSAG, ROMEO BALANSAG, MANUEL BANGOT, ANDY BANJAO, DIONISIO
BENDIJO, JR., JOVENTINO BROCE, ENRICO LITERAL, RODGER RAMIREZ, Of the twenty-two original complainants before the LA, seven appealed the LA’s ruling
BIENVENIDO RODRIGUEZ, DIOCITO PALAGTIW, ERNIE SABLAN, RICHARD PANCHO, before the NLRC, namely: respondents Ferdinand Acibo, Eddie Baldoza, Andy Banjao,
RODRIGO ESTRABELA, DANNY KADUSALE AND ALLYROBYL OLPUS, RESPONDENTS. Dionisio Bendijo, Jr., Rodger Ramirez, Diocito Palagtiw, Danny Kadusale and Allyrobyl
Olpus.
DECISION
BRION, J.: The Ruling of the NLRC

We resolve in this petition for review on certiorari[1] the challenge to the November 29, In its decision [11] of July 22, 2005, the NLRC reversed the LA’s ruling; it declared the
2007 decision[2] and the January 22, 2009 resolution [3] of the Court of Appeals (CA) in CA- complainants as regular URSUMCO employees and granted their monetary claims under
G.R. CEB-SP No. 02028. This CA decision affirmed with modification the July 22, 2005 the CBA.  The NLRC pointed out that the complainants performed activities which were
decision[4] and the April 28, 2006 resolution [5] of the National Labor Relations usually necessary and desirable in the usual trade or business of URSUMCO, and had been
Commission (NLRC) in NLRC Case No. V-00006-03 which, in turn, reversed the October 9, repeatedly hired for the same undertaking every season.  Thus, pursuant to Article 280 of
2002 decision[6] of the Labor Arbiter (LA).   The LA’s decision dismissed the complaint the Labor Code, the NLRC declared that the complainants were regular employees.  As
filed by complainants Ferdinand Acibo, et al.[7] against petitioners Universal Robina Sugar regular employees, the NLRC held that the complainants were entitled to the benefits
Milling Corporation (URSUMCO) and Rene Cabati. granted, under the CBA, to the regular URSUMCO employees.

The Factual Antecedents The petitioners moved to reconsider this NLRC ruling which the NLRC denied in its April
28, 2006 resolution.[12] The petitioners elevated the case to the CA via a petition for
URSUMCO is a domestic corporation engaged in the sugar cane milling business; Cabati is certiorari.[13]
URSUMCO’s Business Unit General Manager.
The Ruling of the CA
The complainants were employees of URSUMCO. They were hired on various dates
(between February 1988 and April 1996) and on different capacities, [8] i.e., drivers, crane In its November 29, 2007 decision, [14] the CA granted in part the petition; it affirmed the
operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel NLRC’s ruling finding the complainants to be regular employees of URSUMCO, but deleted
workers, laborers, carpenters and masons, among others.  At the start of their respective the grant of monetary benefits under the CBA.
engagements, the complainants signed contracts of employment for a period of one (1)
month or for a given season.  URSUMCO repeatedly hired the complainants to perform The CA pointed out that the primary standard for determining regular employment is the
the same duties and, for every engagement, required the latter to sign new employment reasonable connection between a particular activity performed by the employee vis-à-vis
contracts for the same duration of one month or a given season. the usual trade or business of the employer.  This connection, in turn, can be determined
by considering the nature of the work performed and the relation of this work to the
On August 23, 2002,[9] the complainants filed before the LA complaints for regularization, business or trade of the employer in its entirety.
entitlement to the benefits under the existing Collective Bargaining Agreement (CBA), and
attorney’s fees. In this regard, the CA held that the various activities that the complainants were tasked to
do were necessary, if not indispensable, to the nature of URSUMCO’s business.  As the
[10]
In the decision dated October 9, 2002, the LA dismissed the complaint for lack of merit.  complainants had been performing their respective tasks for at least one year, the CA
The LA held that the complainants were seasonal or project workers and not regular held that this repeated and continuing need for the complainants’ performance of these
employees of URSUMCO.  The LA pointed out that the complainants were required to same tasks, regardless of whether the performance was continuous or intermittent,
perform, for a definite period, phases of URSUMCO’s several projects that were not at all constitutes sufficient evidence of the necessity, if not indispensability, of the activity to

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URSUMCO’s business.
The respondents, the petitioners point out, were specifically engaged for a fixed and
Further, the CA noted that the petitioners failed to prove that they gave the complainants predetermined duration of, on the average, one (1) month at a time that coincides with a
opportunity to work elsewhere during the off-season, which opportunity could have particular phase of the company’s business operations or sugar milling season.  By the
qualified the latter as seasonal workers.  Still, the CA pointed out that even during this off- nature of their engagement, the respondents’ employment legally ends upon the end of
season period, seasonal workers are not separated from the service but are simply the predetermined period; thus, URSUMCO was under no legal obligation to rehire the
considered on leave until they are re-employed.  Thus, the CA concluded that the respondents.
complainants were regular employees with respect to the activity that they had been
performing and while the activity continued. In their comment,[18] the respondents maintain that they are regular employees of
URSUMCO.  Relying on the NLRC and the CA rulings, they point out that they have been
On the claim for CBA benefits, the CA, however, ruled that the complainants were not continuously working for URSUMCO for more than one year, performing tasks which
entitled to receive them.  The CA pointed out that while the complainants were were necessary and desirable to URSUMCO’s business.  Hence, under the above-stated
considered regular, albeit seasonal, workers, the CBA-covered regular employees of legal parameters, they are regular employees.
URSUMCO were performing tasks needed by the latter for the entire year with no regard
to the changing sugar milling season.  Hence, the complainants did not belong to and We disagree with the petitioners’ position. We find the respondents to be regular
could not be grouped together with the regular employees of URSUMCO, for collective seasonal employees of URSUMCO.
bargaining purposes;  they constitute a bargaining unit separate and distinct from the
regular employees. Consequently, the CA declared that the complainants could not be As the CA has explained in its challenged decision, Article 280 of the Labor Code provides
covered by the CBA. for three kinds of employment arrangements, namely: regular, project/seasonal and
casual. Regular employment refers to that arrangement whereby the employee “has been
The petitioners filed the present petition after the CA denied their motion for partial engaged to perform activities which are usually necessary or desirable in the usual business
reconsideration [15] in the CA’s January 22, 2009 resolution.[16] or trade of the employer[.]”[19] Under the definition, the primary standard that determines
regular employment is the reasonable connection between the particular activity
The Issues performed by the employee and the usual business or trade of the employer; [20] the
emphasis is on the necessity or desirability of the employee’s activity. Thus, when the
The petition essentially presents the following issues for the Court’s resolution: (1) employee performs activities considered necessary and desirable to the overall business
whether the respondents are regular employees of URSUMCO; and (2) whether scheme of the employer, the law regards the employee as regular.
affirmative relief can be given to the fifteen (15) of the complainants who did not appeal
the LA’s decision.[17] By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular
a casual employment arrangement when the casual employee’s engagement has lasted
The Court’s Ruling for at least one year, regardless of the engagement’s continuity. The controlling test in
this arrangement is the length of time during which the employee is engaged.
We resolve to partially GRANT the petition.
A project employment, on the other hand, contemplates on arrangement  whereby “the
On the issue of the status of employment has been fixed for a specific project or  undertaking  whose completion  or 
the respondents’ employment termination  has  been  determined at the time of the engagement of the employee[.]”[21]
Two requirements, therefore, clearly need to be satisfied to remove the engagement from
The petitioners maintain that the respondents are contractual or project/seasonal the presumption of regularity of employment, namely: (1) designation of a specific
workers and not regular employees of URSUMCO. They thus argue that the CA erred in project or undertaking for which the employee is hired; and (2) clear determination of
applying the legal parameters and guidelines for regular employment to the respondents’ the completion or termination of the project at the time of the employee’s engagement. [22]
case.  They contend that the legal standards – length of the employee’s engagement and The services of the project employees are legally and automatically terminated upon the
the desirability or necessity of the employee’s work in the usual trade or business of the end or completion of the project as the employee’s services are coterminous with the
employer – apply only to regular employees under paragraph 1, Article 280 of the Labor project.
Code, and, under paragraph 2 of the same article, to casual employees who are deemed
regular by their length of service. Unlike in a regular employment under Article 280 of the Labor Code, however, the length

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of time of the asserted “project” employee’s engagement is not controlling as the each other on more or less equal terms[.]” [30] The indispensability or desirability of the
employment may, in fact, last for more than a year, depending on the needs or activity performed by the employee will not preclude the parties from entering into an
circumstances of the project.  Nevertheless, this length of time (or the continuous rehiring otherwise valid fixed term employment agreement; a definite period of employment does
of the employee even after the cessation of the project) may serve as a badge of regular not essentially contradict the nature of the employees duties [31] as necessary and
employment when the activities performed by the purported “project” employee are desirable to the usual business or trade of the employer.
necessary and indispensable to the usual business or trade of the employer. [23] In this
latter case, the law will regard the arrangement as regular employment. [24] Nevertheless, “where the circumstances evidently show that the employer imposed the
period precisely to preclude the employee from acquiring tenurial security, the law and
Seasonal employment operates much in the same way as project employment, albeit it this Court will not hesitate to strike down or disregard the period as contrary to public
involves work or service that is seasonal in nature or lasting for the duration of the policy, morals, etc.”[32] In such a case, the general restrictive rule under Article 280 of the
season.[25] As with project employment, although the seasonal employment arrangement Labor Code will apply and the employee shall be deemed regular.
involves work that is seasonal or periodic in nature, the employment itself is not
automatically considered seasonal so as to prevent the employee from attaining regular Clearly, therefore, the nature of the employment does not depend solely on the will or
status.  To exclude the asserted “seasonal” employee from those classified as regular word of the employer or on the procedure for hiring and the manner of designating the
employees, the employer must show that: (1) the employee must be performing work or employee. Rather, the nature of the employment depends on the nature of the activities
services that are seasonal in nature; and (2) he had been employed for the duration of the to be performed by the employee, considering the nature of the employer’s business, the
season.[26] Hence, when the “seasonal” workers are continuously and repeatedly hired to duration and scope to be done,[33] and, in some cases, even the length of time of the
perform the same tasks or activities for several seasons or even after the cessation of the performance and its continued existence.
season, this length of time may likewise serve as badge of regular employment.[27] In fact,
even though denominated as “seasonal workers,” if these workers are called to work In light of the above legal parameters laid down by the law and applicable jurisprudence,
from time to time and are only temporarily laid off during the off-season, the law does not the respondents are neither project, seasonal nor fixed-term employees, but regular
consider them separated from the service during the off-season period. The law simply seasonal workers of URSUMCO.  The following factual considerations from the records
considers these seasonal workers on leave until re-employed. [28] support this conclusion:

Casual employment, the third kind of employment arrangement, refers to any other First, the respondents were made to perform various tasks that did not at all pertain to
employment arrangement that does not fall under any of the first two categories, i.e., any specific phase of URSUMCO’s strict milling operations that would ultimately cease
regular or project/seasonal. upon completion of a particular phase in the milling of sugar; rather, they were tasked to
perform duties regularly and habitually needed in URSUMCO’s operations during the
Interestingly, the Labor Code does not mention another employment arrangement – milling season. The respondents’ duties as loader operators, hookers, crane operators
contractual or fixed term employment (or employment for a term) – which, if not for the and drivers were necessary to haul and transport the sugarcane from the plantation to
fixed term, should fall under the category of regular employment in view of the nature of the mill; laboratory attendants, workers and laborers to mill the sugar; and welders,
the employee’s engagement, which is to perform an activity usually necessary or carpenters and utility workers to ensure the smooth and continuous operation of the mill
desirable in the employer’s business. for the duration of the milling season, as distinguished from the production of the
sugarcane which involves the planting and raising of the sugarcane until it ripens for
In Brent School, Inc. v. Zamora,[29] the Court, for the first time, recognized and resolved the milling. The production of sugarcane, it must be emphasized, requires a different set of
anomaly created by a narrow and literal interpretation of Article 280 of the Labor Code workers who are experienced in farm or agricultural work.  Needless to say, they perform
that appears to restrict the employee’s right to freely stipulate with his employer on the the activities that are necessary and desirable in sugarcane production. As in the milling
duration of his engagement.  In this case, the Court upheld the validity of the fixed-term of sugarcane, the plantation workers perform their duties only during the planting
employment agreed upon by the employer, Brent School, Inc., and the employee, Dorotio season.
Alegre, declaring that the restrictive clause in Article 280 “should  be  construed  to  refer 
to  the substantive evil that the Code itself x x x singled out: agreements entered into Second, the respondents were regularly and repeatedly hired to perform the same tasks
precisely to circumvent security of tenure. It should have no application to instances year after year. This regular and repeated hiring of the same workers (two different sets)
where [the] fixed period of  employment  was agreed upon knowingly and voluntarily by for two separate seasons has put in place, principally through jurisprudence, the system
the parties x x x absent any x x x circumstances vitiating [the employee’s] consent, or of regular seasonal employment in the sugar industry and other industries with a similar
where [the facts satisfactorily show] that the employer and [the] employee dealt  with nature of operations.

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 declaration, the NLRC in effect granted the respondents’ prayer for regularization and,
Under the system, the plantation workers or the mill employees do not work concomitantly, their prayer for the grant of monetary benefits under the CBA for
continuously for one whole year but only for the duration of the growing of the sugarcane URSUMCO’s regular employees. In its challenged ruling, the CA concurred with the NLRC
or the milling season.  Their seasonal work, however, does not detract from considering finding, but with the respondents characterized as regular seasonal employees of
them in regular employment since in a litany of cases, this Court has already settled that URSUMCO.
seasonal workers who are called to work from time to time and are temporarily laid off
during the off-season are not separated from the service in said period, but are merely The CA misappreciated the real import of the NLRC ruling. The labor agency did not
considered on leave until re-employment.[34] Be this as it may, regular seasonal declare the respondents as regular seasonal employees, but as regular employees. This
employees, like the respondents in this case, should not be confused with the is the only conclusion that can be drawn from the NLRC decision’s dispositive portion,
regular employees of the sugar mill such as the administrative or office personnel thus:
who perform their tasks for the entire year regardless of the season.  The NLRC,
therefore, gravely erred when it declared the respondents regular employees of WHEREFORE, premises considered, the appeal is hereby GRANTED.  Complainants are
URSUMCO without qualification and that they were entitled to the benefits granted, declared regular employees of respondent. As such, they are entitled to the monetary
under the CBA, to URSUMCO’S regular employees. benefits granted to regular employees of respondent company based on the CBA,
reckoned three (3) years back from the filing of the above-entitled case on 23 August
Third, while the petitioners assert that the respondents were free to work elsewhere 2002 up to the present or to their entire service with respondent after the date of filing of
during the off-season, the records do not support this assertion.  There is no evidence on the said complaint if they are no longer connected with respondent company. [43]
record showing that after the completion of their tasks at URSUMCO, the respondents
sought and obtained employment elsewhere. It is, therefore, clear that the issue brought to the CA for resolution is whether the
NLRC gravely abused its discretion in declaring the respondents regular employees
Contrary to the petitioners’ position, Mercado, Sr. v. NLRC, 3rd Div.[35] is not applicable to of URSUMCO and, as such, entitled to the benefits under the CBA for the regular
the respondents as this case was resolved based on different factual considerations. In employees.
Mercado, the workers were hired to perform phases of the agricultural work in their
employer’s farm for a definite period of time; afterwards, they were free to offer their Based on the established facts, we find that the CA grossly misread the NLRC ruling and
services to any other farm owner. The workers were not hired regularly and repeatedly missed the implications of the respondents’ regularization. To reiterate, the respondents
for the same phase(s) of agricultural work, but only intermittently for any single phase. are regular seasonal employees, as the CA itself opined when it declared that “private
And, more importantly, the employer in Mercado sufficiently proved these factual respondents who are regular workers with respect to their seasonal tasks or activities
circumstances. The Court reiterated these same observations in Hda. Fatima v. Nat’l Fed. and while such activities exist, cannot automatically be governed by the CBA between
of Sugarcane Workers-Food and Gen. Trade[36] and Hacienda Bino/Hortencia Starke, Inc. v. petitioner URSUMCO and the authorized bargaining representative of the regular and
Cuenca.[37] permanent employees.”[44] Citing jurisprudential standards,[45] it then proceeded to
explain that the respondents cannot be lumped with the regular employees due to the
At this point, we reiterate the settled rule that in this jurisdiction, only questions of law differences in the nature of their duties and the duration of their work vis-a-vis  the
are allowed in a petition for review on certiorari.[38] This Court’s power of review in a Rule operations of the company.
45 petition is limited to resolving matters pertaining to any perceived legal errors, which
the CA may have committed in issuing the assailed decision. [39] In reviewing the legal The NLRC was well aware of these distinctions as it acknowledged that the respondents
correctness of the CA’s Rule 65 decision in a labor case, we examine the CA decision in the worked only during the milling season, yet it ignored the distinctions and declared them
context that it determined, i.e., the presence or absence of grave abuse of discretion in the regular employees, a marked departure from existing jurisprudence. This, to us, is grave
NLRC decision before it and not on the basis of whether the NLRC decision on the merits abuse of discretion, as it gave no reason for disturbing the system of regular
of the case was correct.[40] In other words, we have to be keenly aware that the CA seasonal employment already in place in the sugar industry and other industries
undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged with similar seasonal operations. For upholding the NLRC’s flawed decision on the
before it.[41] respondents’ employment status, the CA committed a reversible error of judgment.

Viewed in this light, we find the need to place the CA’s affirmation, albeit with In sum, we find the complaint to be devoid of merit. The issue of granting affirmative
modification, of the NLRC decision of July 22, 2005 in perspective. To recall, the NLRC relief to the complainants who did not appeal the CA ruling has become academic.
declared the respondents as regular employees of URSUMCO.[42] With such a

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WHEREFORE, premises considered, the petition is PARTIALLY GRANTED.  Except for
the denial of the respondents’ claim for CBA benefits, the November 29, 2007 decision EN BANC
and the January 22, 2009 resolution of the Court of Appeals are SET ASIDE. The G.R. No. 192571, July 23, 2013
complaint is DISMISSED for lack of merit. ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST,
MARIA OLIVIA T. YABUT-MISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR,
SO ORDERED. PETITIONERS, VS. PEARLIE ANN F. ALCARAZ, RESPONDENT.

Carpio, (Chairperson), Del Castillo, Perez, and Perlas-Bernabe, JJ. concur. DECISION
PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari[1] are the Decision[2] dated December 10,
2009 and Resolution[3] dated June 9, 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
101045 which pronounced that the National Labor Relations Commission (NLRC) did not
gravely abuse its discretion when it ruled that respondent Pearlie Ann F. Alcaraz
(Alcaraz) was illegally dismissed from her employment.

The Facts

On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused the
publication in a major broadsheet newspaper of its need for a Medical and Regulatory
Affairs Manager  (Regulatory Affairs Manager) who would: (a) be responsible for drug
safety surveillance operations, staffing, and budget; (b) lead the development and
implementation of standard operating procedures/policies for drug safety surveillance
and vigilance; and (c) act as the primary interface with internal and external customers
regarding safety operations and queries.[4] Alcaraz – who was then a Regulatory Affairs
and Information Manager at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott) – showed interest and submitted her application
on October 4, 2004.[5]

On December 7, 2004, Abbott formally offered Alcaraz the above-mentioned position

which was an item under the company’s Hospira Affiliate Local Surveillance Unit (ALSU)
department.[6] In Abbott’s offer sheet,[7] it was stated that Alcaraz was to be employed on a
probationary basis.[8] Later that day, she accepted the said offer and received an
electronic mail (e-mail) from Abbott’s Recruitment Officer, petitioner Teresita C.
Bernardo (Bernardo), confirming the same. Attached to Bernardo’s e-mail were Abbott’s
organizational chart and a job description of Alcaraz’s work. [9]

On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia,
that she was to be placed on probation for a period of six (6) months beginning February
15, 2005 to August 14, 2005. The said contract was also signed by Abbott’s General
Manager, petitioner Edwin Feist (Feist):[10]

PROBATIONARY EMPLOYMENT

Dear Pearl,

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 resource officers in the management and discipline of the staff; (e) Hospira ALSU will spin
After having successfully passed the pre-employment requirements, you are hereby off from Abbott in early 2006 and will be officially incorporated and known as Hospira,
appointed as follows: Philippines. In the interim, Hospira ALSU operations will still be under Abbott’s
management, excluding the technical aspects of the operations which is under the control
Position Title : Regulatory Affairs Manager and supervision of Walsh; and (f) the processing of information and/or raw material data
Department   : Hospira subject of Hospira ALSU operations will be strictly confined and controlled under the
computer system and network being maintained and operated from the United States.
The terms of your employment are: For this purpose, all those involved in Hospira ALSU are required to use two
identification cards: one, to identify them as Abbott’s employees and another, to identify
Nature of Employment  : Probationary them as Hospira employees.[11]
Effectivity                      : February 15, 2005 to August 14, 2005
Basic Salary                  : P110,000.00/ month On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s Human
Resources (HR) Director, sent Alcaraz an e-mail which contained an explanation of the
It is understood that you agree to abide by all existing policies, rules and regulations of procedure for evaluating the performance of probationary employees and further
the company, as well as those, which may be hereinafter promulgated. indicated that Abbott had only one evaluation system for all of its employees. Alcaraz was
also given copies of Abbott’s Code of Conduct and Probationary Performance Standards
Unless renewed, probationary appointment expires on the date indicated subject to and Evaluation (PPSE) and Performance Excellence Orientation Modules (Performance
earlier termination by the Company for any justifiable reason. Modules) which she had to apply in line with her task of evaluating the Hospira ALSU
staff.[12]
If you agree to the terms and conditions of your employment, please signify your
conformity below and return a copy to HRD. Abbott’s PPSE procedure mandates that the job performance of a probationary employee
should be formally reviewed and discussed with the employee at least twice: first on the
Welcome to Abbott! third month and second on the fifth month from the date of employment. The necessary
Performance Improvement Plan should also be made during the third-month review in
Very truly yours, case of a gap between the employee’s performance and the standards set. These
performance standards should be discussed in detail with the employee within the first
Sgd. two (2) weeks on the job. It was equally required that a signed copy of the PPSE form
EDWIN D. FEIST must be submitted to Abbott’s Human Resources Department (HRD) and shall serve as
General Manager documentation of the employee’s performance during his/her probationary period. This
shall form the basis for recommending the confirmation or termination of the
CONFORME: probationary employment.[13]

Sgd. During the course of her employment, Alcaraz noticed that some of the staff had
PEARLIE ANN FERRER-ALCARAZ disciplinary problems. Thus, she would reprimand them for their unprofessional
behavior such as non-observance of the dress code, moonlighting, and disrespect of
During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar (Almazar), Abbott officers. However, Alcaraz’s method of management was considered by Walsh to
Hospira’s Country Transition Manager, briefed her on her duties and responsibilities as be “too strict.” [14] Alcaraz approached Misa to discuss these concerns and was told to “lie
Regulatory Affairs Manager, stating that: (a) she will handle the staff of Hospira ALSU and low” and let Walsh handle the matter. Misa even assured her that Abbott’s HRD would
will directly report to Almazar on matters regarding Hopira’s local operations, support her in all her management decisions. [15]
operational budget, and performance evaluation of the Hospira ALSU Staff who are on
probationary status; (b) she must implement Abbott’s Code of Good Corporate Conduct On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on
(Code of Conduct), office policies on human resources and finance, and ensure that the staff’s performance evaluation as their probationary periods were about to end. This
Abbott will hire people who are fit in the organizational discipline;  (c) petitioner Kelly Alcaraz eventually submitted.[16]
Walsh (Walsh), Manager of the Literature Drug Surveillance Drug Safety of Hospira, will
be her immediate supervisor; (d) she should always coordinate with Abbott’s human On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible (Terrible),

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Abbott’s former HR Director, to discuss certain issues regarding staff performance The LA Ruling
standards. In the course thereof, Alcaraz accidentally saw a printed copy of an e-mail sent
by Walsh to some staff members which essentially contained queries regarding the In a Decision dated March 30, 2006,[29]  the LA dismissed Alcaraz’s complaint for lack of
former’s job performance. Alcaraz asked if Walsh’s action was the normal process of merit.
evaluation. Terrible said that it was not.[17]
The LA rejected Alcaraz’s argument that she was not informed of the reasonable
On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible where she was standards to qualify as a regular employee considering her admissions that she was
informed that she failed to meet the regularization standards for the position of briefed by Almazar on her work during her pre-employment orientation meeting [30] and
Regulatory Affairs Manager.[18] Thereafter, Walsh and Terrible requested Alcaraz to that she received copies of Abbott’s Code of Conduct and Performance Modules which
tender her resignation, else they be forced to terminate her services. She was also told were used for evaluating all types of Abbott employees. [31] As Alcaraz was unable to meet
that, regardless of her choice, she should no longer report for work and was asked to the standards set by Abbott as per her performance evaluation, the LA ruled that the
surrender her office identification cards. She requested to be given one week to decide on termination of her probationary employment was justified. [32] Lastly, the LA found that
the same, but to no avail.[19] there was no evidence to conclude that Abbott’s officers and employees acted in bad faith
in terminating Alcaraz’s employment.[33]
On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales (Gonzales),
that she would be on leave for that day. However, Gonzales told her that Walsh and Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor Relations
Terrible already announced to the whole Hospira ALSU staff that Alcaraz already Commission (NLRC).
resigned due to health reasons. [20]
The NLRC Ruling
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter
stating that her services had been terminated effective May 19, 2005. [21] The letter On September 15, 2006, the NLRC rendered a Decision, [34] annulling and setting aside the
detailed the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did not LA’s ruling, the dispositive portion of which reads:
manage her time effectively; (b) failed to gain the trust of her staff and to build an
effective rapport with them; (c) failed to train her staff effectively; and (d) was not able to WHEREFORE, the Decision of the Labor Arbiter dated 31 March 2006 [sic] is hereby
obtain the knowledge and ability to make sound judgments on case processing and article reversed, annulled and set aside and judgment is hereby rendered:
review which were necessary for the proper performance of her duties. [22] On May 27,
2005, Alcaraz received another copy of the said termination letter via registered mail. [23] 1. Finding respondents Abbot [sic] and individual respondents to have committed illegal
dismissal;
Alcaraz felt that she was unjustly terminated from her employment and thus, filed a
complaint for illegal dismissal and damages against Abbott and its officers, namely, Misa, 2. Respondents are ordered to immediately reinstate complainant to her former position
Bernardo, Almazar, Walsh, Terrible, and Feist.[24] She claimed that she should have without loss of seniority rights immediately upon receipt hereof;
already been considered as a regular and not a probationary employee given Abbott’s
failure to inform her of the reasonable standards for her regularization upon her 3. To jointly and severally pay complainant backwages computed from 16 May 2005 until
engagement as required under Article 295[25] of the Labor Code. In this relation, she finality of this decision. As of the date hereof the backwages is computed at
contended that while her employment contract stated that she was to be engaged on a
probationary status, the same did not indicate the standards on which her regularization a. Backwages for 15 months - PhP 1,650,000.00
would be based.[26] She further averred that the individual petitioners maliciously b. 13th month pay -            110,000.00
connived to illegally dismiss her when: (a) they threatened her with termination; (b) she TOTAL PhP 1,760,000.00
was ordered not to enter company premises even if she was still an employee thereof;
and (c) they publicly announced that she already resigned in order to humiliate her. [27] 4. Respondents are ordered to pay complainant moral damages of P50,000.00 and
exemplary damages of P50,000.00.
On the contrary, petitioners maintained that Alcaraz was validly terminated from her
probationary employment given her failure to satisfy the prescribed standards for her 5. Respondents are also ordered to pay attorney’s fees of 10% of the total award.
regularization which were made known to her at the time of her engagement. [28]
6. All other claims are dismissed for lack of merit.

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 18, 2010 Resolution) and ruled that the NLRC was correct in upholding the execution of
SO ORDERED. [35] the NLRC Decision.[49] Thus, petitioners filed a motion for reconsideration.

The NLRC reversed the findings of the LA and ruled that there was no evidence showing While the petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution
that Alcaraz had been apprised of her probationary status and the requirements which was pending, Alcaraz again moved for the issuance of a writ of execution before the LA.
she should have complied with in order to be a regular employee. [36] It held that Alcaraz’s On June 7, 2010, petitioners received the LA’s order granting Alcaraz’s motion for
receipt of her job description and Abbott’s Code of Conduct and Performance Modules execution which they in turn appealed to the NLRC – through a Memorandum of Appeal
was not equivalent to her being actually informed of the performance standards upon dated June 16, 2010 (June 16, 2010 Memorandum of Appeal ) – on the ground that the
which she should have been evaluated on.[37] It further observed that Abbott did not implementation of the LA’s order would render its motion for reconsideration moot and
comply with its own standard operating procedure in evaluating probationary academic.[50]
employees.[38] The NLRC was also not convinced that Alcaraz was terminated for a valid
cause given that petitioners’ allegation of Alcaraz’s “poor performance” remained Meanwhile, petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution
unsubstantiated.[39] in the Second CA Petition was denied via a Resolution dated October 4, 2010. [51] This
attained finality on January 10, 2011 for petitioners’ failure to timely appeal the same. [52]
Petitioners filed a motion for reconsideration which was denied by the NLRC in a Hence, as it stands, only the issues in the First CA petition are left to be resolved.
Resolution dated July 31, 2007.[40]
Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges that
Aggrieved, petitioners filed with the CA a Petition for Certiorari with Prayer for Issuance petitioners were guilty of forum shopping when they filed the Second CA Petition pending
of a Temporary Restraining Order and/or Writ of Preliminary Injunction, docketed as CA the resolution of their motion for reconsideration of the CA’s December 10, 2009 Decision
G.R. SP No. 101045 (First CA Petition), alleging grave abuse of discretion on the part of i.e., the decision in the First CA Petition.[53] She also contends that petitioners have not
NLRC when it ruled that Alcaraz was illegally dismissed. [41] complied with the certification requirement under Section 5, Rule 7 of the Rules of Court
when they failed to disclose in the instant petition the filing of the June 16, 2010
Pending resolution of the First CA Petition, Alcaraz moved for the execution of the NLRC’s Memorandum of Appeal filed before the NLRC.[54]
Decision before the LA, which petitioners strongly opposed. The LA denied the said
motion in an Order dated July 8, 2008 which was, however, eventually reversed on appeal The Issues Before the Court
by the NLRC.[42] Due to the foregoing, petitioners filed another Petition for Certiorari with
the CA, docketed as CA G.R. SP No. 111318 (Second CA Petition), assailing the propriety The following issues have been raised for the Court’s resolution: (a) whether or not
of the execution of the NLRC decision. [43] petitioners are guilty of forum shopping and have violated the certification requirement
under Section 5, Rule 7 of the Rules of Court; (b) whether or not Alcaraz was sufficiently
The CA Ruling informed of the reasonable standards to qualify her as a regular employee; (c) whether or
not Alcaraz was validly terminated from her employment; and (d) whether or not the
With regard to the First CA Petition, the CA, in a Decision [44] dated December 10, 2009, individual petitioners herein are liable.
affirmed the ruling of the NLRC and held that the latter did not commit any grave abuse of
discretion in finding that Alcaraz was illegally dismissed. The Court’s Ruling

It observed that Alcaraz was not apprised at the start of her employment of the A.  Forum Shopping and Violation of Section 5,
reasonable standards under which she could qualify as a regular employee. [45] This was Rule 7 of the Rules of Court.
based on its examination of the employment contract which showed that the same did
not contain any standard of performance or any stipulation that Alcaraz shall undergo a At the outset, it is noteworthy to mention that the prohibition against forum shopping is
performance evaluation before she could qualify as a regular employee. [46] It also found different from a violation of the certification requirement under Section 5, Rule 7 of the
that Abbott was unable to prove that there was any reasonable ground to terminate Rules of Court. In Sps. Ong v. CA,[55] the Court explained that:
Alcaraz’s employment.[47] Abbott moved for the reconsideration of the aforementioned
ruling which was, however, denied by the CA in a Resolution [48] dated June 9, 2010. x x x The distinction between the prohibition against forum shopping and the
certification requirement should by now be too elementary to be misunderstood. To
The CA likewise denied the Second CA Petition in a Resolution dated May 18, 2010 (May reiterate, compliance with the certification against forum shopping is separate from and

116
independent of the avoidance of the act of forum shopping itself. There is a difference in attained finality – the matter of disclosing the June 16, 2010 Memorandum of Appeal is
the treatment between failure to comply with the certification requirement and violation now moot and academic.
of the prohibition against forum shopping not only in terms of imposable sanctions but
also in the manner of enforcing them. The former constitutes sufficient cause for the Having settled the foregoing procedural matter, the Court now proceeds to resolve the
dismissal without prejudice [to the filing] of the complaint or initiatory pleading upon substantive issues.
motion and after hearing, while the latter is a ground for summary dismissal thereof and
for direct contempt. x x x. [56] B.  Probationary employment;
grounds for termination.
As to the first, forum shopping takes place when a litigant files multiple suits involving
the same parties, either simultaneously or successively, to secure a favorable judgment. It A probationary employee, like a regular employee, enjoys security of tenure. However, in
exists where the elements of litis pendentia are present, namely: (a) identity of parties, or cases of probationary employment, aside from just or authorized causes of termination,
at least such parties who represent the same interests in both actions; (b) identity of an additional ground is provided under Article 295 of the Labor Code, i.e., the
rights asserted and relief prayed for, the relief being founded on the same facts; and (c) probationary employee may also be terminated for failure to qualify as a regular
the identity with respect to the two preceding particulars in the two (2) cases is such that employee in accordance with the reasonable standards made known by the employer to
any judgment that may be rendered in the pending case, regardless of which party is the employee at the time of the engagement.[59] Thus, the services of an employee who has
successful, would amount to res judicata in the other case.[57] been engaged on probationary basis may be terminated for any of the following: (a) a just
or (b) an authorized cause; and (c) when he fails to qualify as a regular employee in
In this case, records show that, except for the element of identity of parties, the elements accordance with reasonable standards prescribed by the employer. [60]
of forum shopping do not exist. Evidently, the First CA Petition was instituted to question
the ruling of the NLRC that Alcaraz was illegally dismissed. On the other hand, the Second Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor
CA Petition pertains to the propriety of the enforcement of the judgment award pending Code provides that if the employer fails to inform the probationary employee of the
the resolution of the First CA Petition and the finality of the decision in the labor dispute reasonable standards upon which the regularization would be based on at the time of the
between Alcaraz and the petitioners. Based on the foregoing, a judgment in the Second CA engagement, then the said employee shall be deemed a regular employee, viz.:
Petition will not constitute res judicata insofar as the First CA Petition is concerned. Thus,
considering that the two petitions clearly cover different subject matters and causes of (d) In all cases of probationary employment, the employer shall make known to the
action, there exists no forum shopping. employee the standards under which he will qualify as a regular employee at the time of
his engagement. Where no standards are made known to the employee at that time, he
As to the second, Alcaraz further imputes that the petitioners violated the certification shall be deemed a regular employee.
requirement under Section 5, Rule 7 of the Rules of Court [58] by not disclosing the fact that
it filed the June 16, 2010 Memorandum of Appeal before the NLRC in the instant petition. In other words, the employer is made to comply with two (2) requirements when dealing
with a probationary employee: first, the employer must communicate the regularization
In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who files standards to the probationary employee; and second, the employer must make such
a case should provide a complete statement of the present status of any pending case if communication at the time of the probationary employee’s engagement. If the employer
the latter involves the same issues as the one that was filed. If there is no such similar fails to comply with either, the employee is deemed as a regular and not a probationary
pending case, Section 5(a) of the same rule provides that the plaintiff is obliged to declare employee.
under oath that to the best of his knowledge, no such other action or claim is pending.
Keeping with these rules, an employer is deemed to have made known the standards that
Records show that the issues raised in the instant petition and those in the June 16, 2010 would qualify a probationary employee to be a regular employee when it has exerted
Memorandum of Appeal filed with the NLRC likewise cover different subject matters and reasonable efforts to apprise the employee of what he is expected to do or accomplish
causes of action. In this case, the validity of Alcaraz’s dismissal is at issue whereas in the during the trial period of probation. This goes without saying that the employee is
said Memorandum of Appeal, the propriety of the issuance of a writ of execution was in sufficiently made aware of his probationary status as well as the length of time of the
question. Thus, given the dissimilar issues, petitioners did not have to disclose in the probation.
present petition the filing of their June 16, 2010 Memorandum of Appeal with the NLRC.
In any event, considering that the issue on the propriety of the issuance of a writ of The exception to the foregoing is when the job is self-descriptive in nature, for instance,
execution had been resolved in the Second CA Petition – which in fact had already in the case of maids, cooks, drivers, or messengers.[61] Also, in Aberdeen Court, Inc. v.

117
Agustin,[62] it has been held that the rule on notifying a probationary employee of the (g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules from
standards of regularization should not be used to exculpate an employee who acts in a Misa who explained to her the procedure for evaluating the performance of probationary
manner contrary to basic knowledge and common sense in regard to which there is no employees; she was further notified that Abbott had only one evaluation system for all of
need to spell out a policy or standard to be met. In the same light, an employee’s failure to its employees; and
perform the duties and responsibilities which have been clearly made known to him
constitutes a justifiable basis for a probationary employee’s non-regularization. (h) Moreover, Alcaraz had previously worked for another pharmaceutical company and
had admitted to have an “extensive training and background” to acquire the necessary
In this case, petitioners contend that Alcaraz was terminated because she failed to qualify skills for her job.[63]
as a regular employee according to Abbott’s standards which were made known to her at
the time of her engagement. Contrarily, Alcaraz claims that Abbott never apprised her of Considering the totality of the above-stated circumstances, it cannot, therefore, be
these standards and thus, maintains that she is a regular and not a mere probationary doubted that Alcaraz was well-aware that her regularization would depend on her ability
employee. and capacity to fulfill the requirements of her position as Regulatory Affairs Manager and
that her failure to perform such would give Abbott a valid cause to terminate her
The Court finds petitioners’ assertions to be well-taken. probationary employment.

A punctilious examination of the records reveals that Abbott had indeed complied with Verily, basic knowledge and common sense dictate that the adequate performance of
the above-stated requirements. This conclusion is largely impelled by the fact that Abbott one’s duties is, by and of itself, an inherent and implied standard for a probationary
clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager employee to be regularized; such is a regularization standard which need not be literally
prior to, during the time of her engagement, and the incipient stages of her employment. spelled out or mapped into technical indicators in every case. In this regard, it must be
On this score, the Court finds it apt to detail not only the incidents which point out to the observed that the assessment of adequate duty performance is in the nature of a
efforts made by Abbott but also those circumstances which would show that Alcaraz was management prerogative which when reasonably exercised – as Abbott did in this case –
well-apprised of her employer’s expectations that would, in turn, determine her should be respected. This is especially true of a managerial employee like Alcaraz who
regularization: was tasked with the vital responsibility of handling the personnel and important matters
of her department.
(a) On June 27, 2004, Abbott caused the publication in a major broadsheet newspaper of
its need for a Regulatory Affairs Manager, indicating therein the job description for as In fine, the Court rules that Alcaraz’s status as a probationary employee and her
well as the duties and responsibilities attendant to the aforesaid position; this prompted consequent dismissal must stand. Consequently, in holding that Alcaraz was illegally
Alcaraz to submit her application to Abbott on October 4, 2004; dismissed due to her status as a regular and not a probationary employee, the Court finds
that the NLRC committed a grave abuse of discretion.
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be
employed on a probationary status; To elucidate, records show that the NLRC based its decision on the premise that Alcaraz’s
receipt of her job description and Abbott’s Code of Conduct and Performance Modules
(c)  On February 12, 2005, Alcaraz signed an employment contract which specifically was not equivalent to being actually informed of the performance standards upon which
stated, inter alia, that she was to be placed on probation for a period of six (6) months she should have been evaluated on.[64] It, however, overlooked the legal implication of the
beginning February 15, 2005 to August 14, 2005; other attendant circumstances as detailed herein which should have warranted a
contrary finding that Alcaraz was indeed a probationary and not a regular employee –
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies of more particularly the fact that she was well-aware of her duties and responsibilities and
Abbott’s organizational structure and her job description through e-mail; that her failure to adequately perform the same would lead to her non-regularization and
eventually, her termination.
(e)  Alcaraz was made to undergo a pre-employment orientation where Almazar
informed her that she had to implement Abbott’s Code of Conduct and office policies on Accordingly, by affirming the NLRC’s pronouncement which is tainted with grave abuse of
human resources and finance and that she would be reporting directly to Walsh; discretion, the CA committed a reversible error which, perforce, necessitates the reversal
of its decision.
(f)  Alcaraz was also required to undergo a training program as part of her orientation;
C.  Probationary employment; termination procedure.

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A different procedure is applied when terminating a probationary employee; the usual Records show that Abbott’s PPSE procedure mandates, inter alia, that the job
two-notice rule does not govern.[65] Section 2, Rule I, Book VI of the Implementing Rules of performance of a probationary employee should be formally reviewed and discussed
the Labor Code states that “[i]f the termination is brought about by the x x x failure of an with the employee at least twice: first on the third month and second on the fifth month
employee to meet the standards of the employer in case of probationary employment, it from the date of employment. Abbott is also required to come up with a Performance
shall be sufficient that a written notice is served the employee, within a reasonable time Improvement Plan during the third month review to bridge the gap between the
from the effective date of termination.” employee’s performance and the standards set, if any. [69] In addition, a signed copy of the
PPSE form should be submitted to Abbott’s HRD as the same would serve as basis for
As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005 recommending the confirmation or termination of the probationary employment. [70]
which she received on May 23, 2005 and again on May 27, 2005. Stated therein were the
reasons for her termination, i.e., that after proper evaluation, Abbott determined that she In this case, it is apparent that Abbott failed to follow the above-stated procedure in
failed to meet the reasonable standards for her regularization considering her lack of evaluating Alcaraz.  For one, there lies a hiatus of evidence that a signed copy of Alcaraz’s
time and people management and decision-making skills, which are necessary in the PPSE form was submitted to the HRD. It was not even shown that a PPSE form was
performance of her functions as Regulatory Affairs Manager. [66] Undeniably, this written completed to formally assess her performance. Neither was the performance evaluation
notice sufficiently meets the criteria set forth above, thereby legitimizing the cause and discussed with her during the third and fifth months of her employment. Nor did Abbott
manner of Alcaraz’s dismissal as a probationary employee under the parameters set by come up with the necessary Performance Improvement Plan to properly gauge Alcaraz’s
the Labor Code.[67] performance with the set company standards.

D.  Employer’s violation of company While it is Abbott’s management prerogative to promulgate its own company rules and
policy and procedure.  even subsequently amend them, this right equally demands that when it does create its
own policies and thereafter notify its employee of the same, it accords upon itself the
Nonetheless, despite the existence of a sufficient ground to terminate Alcaraz’s obligation to faithfully implement them. Indeed, a contrary interpretation would entail a
employment and Abbott’s compliance with the Labor Code termination procedure, it is disharmonious relationship in the work place for the laborer should never be mired by
readily apparent that Abbott breached its contractual obligation to Alcaraz when it failed the uncertainty of flimsy rules in which the latter’s labor rights and duties would, to some
to abide by its own procedure in evaluating the performance of a probationary employee. extent, depend.

Veritably, a company policy partakes of the nature of an implied contract between the In this light, while there lies due cause to terminate Alcaraz’s probationary employment
employer and employee. In Parts Depot, Inc. v. Beiswenger,[68] it has been held that: for her failure to meet the standards required for her regularization, and while it must be
further pointed out that Abbott had satisfied its statutory duty to serve a written notice of
[E]mployer statements of policy . . . can give rise to contractual rights in employees termination, the fact that it violated its own company procedure renders the termination
without evidence that the parties mutually agreed that the policy statements would of Alcaraz’s employment procedurally infirm, warranting the payment of nominal
create contractual rights in the employee, and, hence, although the statement of policy is damages. A further exposition is apropos.
signed by neither party, can be unilaterally amended by the employer without notice to
the employee, and contains no reference to a specific employee, his job description or Case law has settled that an employer who terminates an employee for a valid cause but
compensation, and although no reference was made to the policy statement in pre- does so through invalid procedure is liable to pay the latter nominal damages.
employment interviews and the employee does not learn of its existence until after his
hiring. Toussaint, 292 N.W .2d at 892. The principle is akin to estoppel. Once an In Agabon v. NLRC (Agabon),[71] the Court pronounced that where the dismissal is for a
employer establishes an express personnel policy and the employee continues to just cause, the lack of statutory due process should not nullify the dismissal, or render it
work while the policy remains in effect, the policy is deemed an implied contract illegal, or ineffectual. However, the employer should indemnify the employee for the
for so long as it remains in effect. If the employer unilaterally changes the policy, violation of his statutory rights.[72] Thus, in Agabon, the employer was ordered to pay the
the terms of the implied contract are also thereby changed. (Emphasis and employee nominal damages in the amount of P30,000.00. [73]
underscoring supplied.)
Proceeding from the same ratio, the Court modified Agabon in the case of Jaka Food
Hence, given such nature, company personnel policies create an obligation on the part of Processing Corporation v. Pacot (Jaka)[74] where it created a distinction between
both the employee and the employer to abide by the same. procedurally defective dismissals due to a just cause, on one hand, and those due to an

119
authorized cause, on the other.
In this case, Alcaraz alleges that the individual petitioners acted in bad faith with regard
It was explained that if the dismissal is based on a just cause under Article 282 of the to the supposed crude manner by which her probationary employment was terminated
Labor Code (now Article 296) but the employer failed to comply with the notice and thus, should be held liable together with Abbott. In the same vein, she further
requirement, the sanction to be imposed upon him should be tempered because the attributes the loss of some of her remaining belongings to them. [81]
dismissal process was, in effect, initiated by an act imputable to the employee; if the
dismissal is based on an authorized cause under Article 283 (now Article 297) but the Alcaraz’s contention fails to persuade.
employer failed to comply with the notice requirement, the sanction should be stiffer
because the dismissal process was initiated by the employer’s exercise of his A judicious perusal of the records show that other than her unfounded assertions on the
management prerogative.[75] Hence, in Jaka, where the employee was dismissed for an matter, there is no evidence to support the fact that the individual petitioners herein, in
authorized cause of retrenchment[76] – as contradistinguished from the employee in their capacity as Abbott’s officers and employees, acted in bad faith or were motivated by
Agabon who was dismissed for a just cause of neglect of duty [77] – the Court ordered the ill will in terminating Alcaraz’s services. The fact that Alcaraz was made to resign and not
employer to pay the employee nominal damages at the higher amount of P50,000.00. allowed to enter the workplace does not necessarily indicate bad faith on Abbott’s part
since a sufficient ground existed for the latter to actually proceed with her termination.
Evidently, the sanctions imposed in both Agabon and Jaka proceed from the necessity to On the alleged loss of her personal belongings, records are bereft of any showing that the
deter employers from future violations of the statutory due process rights of employees. same could be attributed to Abbott or any of its officers. It is a well-settled rule that bad
[78]
In similar regard, the Court deems it proper to apply the same principle to the case at faith cannot be presumed and he who alleges bad faith has the onus of proving it. All told,
bar for the reason that an employer’s contractual breach of its own company procedure – since Alcaraz failed to prove any malicious act on the part of Abbott or any of its officers,
albeit not statutory in source – has the parallel effect of violating the laborer’s rights. the Court finds the award of moral or exemplary damages unwarranted.
Suffice it to state, the contract is the law between the parties and thus, breaches of the
same impel recompense to vindicate a right that has been violated. Consequently, while WHEREFORE, the petition is GRANTED. The Decision dated December 10, 2009 and
the Court is wont to uphold the dismissal of Alcaraz because a valid cause exists, the Resolution dated June 9, 2010  of the Court of Appeals in CA-G.R. SP No. 101045 are
payment of nominal damages on account of Abbott’s contractual breach is warranted in hereby REVERSED and SET ASIDE. Accordingly, the Decision dated March 30, 2006 of
accordance with Article 2221 of the Civil Code.[79] the Labor Arbiter is REINSTATED with the MODIFICATION that petitioner Abbott
Laboratories, Philippines be ORDERED to pay respondent Pearlie Ann F. Alcaraz nominal
Anent the proper amount of damages to be awarded, the Court observes that Alcaraz’s damages in the amount of P30,000.00 on account of its breach of its own company
dismissal proceeded from her failure to comply with the standards required for her procedure.
regularization. As such, it is undeniable that the dismissal process was, in effect, initiated
by an act imputable to the employee, akin to dismissals due to just causes under Article SO ORDERED.
296 of the Labor Code. Therefore, the Court deems it appropriate to fix the amount of
nominal damages at the amount of P30,000.00, consistent with its rulings in both Agabon Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Abad,
and Jaka. Villarama, Jr., Perez, and Reyes, JJ., concur.
Brion, J., see dissent.
E.  Liability of individual petitioners Mendoza, J., but concur with J. Brion in his views on the procedural aspect.
as corporate officers.  Leonen, I join J. Brion in his dissent.

It is hornbook principle that personal liability of corporate directors, trustees or officers

attaches only when: (a) they assent to a patently unlawful act of the corporation, or when
they are guilty of bad faith or gross negligence in directing its affairs, or when there is a
conflict of interest resulting in damages to the corporation, its stockholders or other
persons; (b) they consent to the issuance of watered down stocks or when, having
knowledge of such issuance, do not forthwith file with the corporate secretary their
written objection; (c) they agree to hold themselves personally and solidarily liable with
the corporation; or (d) they are made by specific provision of law personally answerable
for their corporate action.[80]

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 EN BANC
G.R. No. 192571, April 22, 2014
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST,
MARIA OLIVIA T. YABUT-MISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR,
PETITIONERS, VS. PEARLIE ANN F. ALCARAZ, RESPONDENT.

RESOLUTION

PERLAS-BERNABE, J.:

For resolution is respondent Pearlie Ann Alcaraz’s (Alcaraz) Motion for Reconsideration
dated August 23, 2013 of the Court’s Decision dated July 23, 2013 (Decision). [1]

At the outset, there appears to be no substantial argument in the said motion sufficient
for the Court to depart from the pronouncements made in the initial ruling. But if only to
address Alcaraz’s novel assertions, and to so placate any doubt or misconception in the
resolution of this case, the Court proceeds to shed light on the matters indicated below.

A. Manner of review.

Alcaraz contends that the Court should not have conducted a re-weighing of evidence
since a petition for review on certiorari under Rule 45 of the Rules of Court (Rules) is
limited to the review of questions of law. She submits that since what was under review
was a ruling of the Court of Appeals (CA) rendered via a petition for certiorari under Rule
65 of the Rules, the Court should only determine whether or not the CA properly
determined that the National Labor Relations Commission (NLRC) committed a grave
abuse of discretion.

The assertion does not justify the reconsideration of the assailed Decision.

A careful perusal of the questioned Decision will reveal that the Court actually resolved
the controversy under the above-stated framework of analysis. Essentially, the Court
found the CA to have committed an error in holding that no grave abuse of discretion can
be ascribed to the NLRC since the latter arbitrarily disregarded the legal implication of
the attendant circumstances in this case which should have simply resulted in the finding
that Alcaraz was apprised of the performance standards for her regularization and hence,
was properly a probationary employee. As the Court observed, an employee’s failure to
perform the duties and responsibilities which have been clearly made known to him
constitutes a justifiable basis for a probationary employee’s non-regularization. As
detailed in the Decision, Alcaraz was well-apprised of her duties and responsibilities as
well as the probationary status of her employment:

(a) On June 27, 2004, [Abbott Laboratories, Philippines (Abbott)] caused the publication
in a major broadsheet newspaper of its need for a Regulatory Affairs Manager, indicating
therein the job description for as well as the duties and responsibilities attendant to the

121
aforesaid position; this prompted Alcaraz to submit her application to Abbott on October Consequently, since the CA found that the NLRC did not commit grave abuse of discretion
4, 2004; and denied the certiorari petition before it, the reversal of its ruling was thus in order.

(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be At this juncture, it bears exposition that while NLRC decisions are, by their nature, final
employed on a probationary status; and executory[4] and, hence, not subject to appellate review,[5]  the Court is not precluded
from considering other questions of law aside from the CA’s finding on the NLRC’s grave
(c) On February 12, 2005, Alcaraz signed an employment contract which specifically abuse of discretion. While the focal point of analysis revolves on this issue, the Court may
stated, inter alia, that she was to be placed on probation for a period of six (6) months deal with ancillary issues – such as, in this case, the question of how a probationary
beginning February 15, 2005 to August 14, 2005; employee is deemed to have been informed of the standards of his regularization – if only
to determine if the concepts and principles of labor law were correctly applied or
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies of misapplied by the NLRC in its decision. In other words, the Court’s analysis of the NLRC’s
Abbott’s organizational structure and her job description through e-mail; interpretation of the environmental principles and concepts of labor law is not
completely prohibited in – as it is complementary to – a Rule 45 review of labor cases.
(e) Alcaraz was made to undergo a pre-employment orientation where [Allan G. Almazar]
informed her that she had to implement Abbott’s Code of Conduct and office policies on Finally, if only to put to rest Alcaraz’s misgivings on the manner in which this case was
human resources and finance and that she would be reporting directly to [Kelly Walsh]; reviewed, it bears pointing out that no “factual appellate review” was conducted by the
Court in the Decision. Rather, the Court proceeded to interpret the relevant rules on
(f) Alcaraz was also required to undergo a training program as part of her orientation; probationary employment as applied to settled factual findings. Besides, even on the
assumption that a scrutiny of facts was undertaken, the Court is not altogether barred
(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules from from conducting the same. This was explained in the case of Career Philippines
[Maria Olivia T. Yabut-Misa] who explained to her the procedure for evaluating the Shipmanagement, Inc. v. Serna[6] wherein the Court held as follows:
performance of probationary employees; she was further notified that Abbott had only
one evaluation system for all of its employees; and Accordingly, we do not re-examine conflicting evidence, re-evaluate the credibility of
witnesses, or substitute the findings of fact of the NLRC, an administrative body that has
(h) Moreover, Alcaraz had previously worked for another pharmaceutical company and expertise in its specialized field. Nor do we substitute our “own judgment for that of the
had admitted to have an “extensive training and background” to acquire the necessary tribunal in determining where the weight of evidence lies or what evidence is credible.”
skills for her job.[2] The factual findings of the NLRC, when affirmed by the CA, are generally conclusive on
this Court.
Considering the foregoing incidents which were readily observable from the records, the
Court reached the conclusion that the NLRC committed grave abuse of discretion, viz.: Nevertheless, there are exceptional cases where we, in the exercise of our
discretionary appellate jurisdiction may be urged to look into factual issues raised
[I]n holding that Alcaraz was illegally dismissed due to her status as a regular and not a in a Rule 45 petition. For instance, when the petitioner persuasively alleges that there is
probationary employee, the Court finds that the NLRC committed a grave abuse of insufficient or insubstantial evidence on record to support the factual findings of the
discretion. tribunal or court a quo, as Section 5, Rule 133 of the Rules of Court states in express
terms that in cases filed before administrative or quasi-judicial bodies, a fact may be
To elucidate, records show that the NLRC based its decision on the premise that Alcaraz’s deemed established only if supported by substantial evidence. [7] (Emphasis supplied)
receipt of her job description and Abbott’s Code of Conduct and Performance Modules
was not equivalent to being actually informed of the performance standards upon which
she should have been evaluated on. It, however, overlooked the legal implication of the
other attendant circumstances as detailed herein which should have warranted a B. Standards for regularization;
contrary finding that Alcaraz was indeed a probationary and not a regular employee – conceptual underpinnings.
more particularly the fact that she was well-aware of her duties and responsibilities and
that her failure to adequately perform the same would lead to her non-regularization and Alcaraz posits that, contrary to the Court’s Decision, one’s job description cannot by and
eventually, her termination.[3] of itself be treated as a standard for regularization as a standard denotes a measure of
quantity or quality. By way of example, Alcaraz cites the case of a probationary

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salesperson and asks how does such employee achieve regular status if he does not know regularization.
how much he needs to sell to reach the same.
In this relation, it bears mentioning that the performance standard contemplated by law
The argument is untenable. should not, in all cases, be contained in a specialized system of feedbacks or evaluation.
The Court takes judicial notice of the fact that not all employers, such as simple
First off, the Court must correct Alcaraz’s mistaken notion: it is not the probationary businesses or small-scale enterprises, have a sophisticated form of human resource
employee’s job description but the adequate performance of his duties and management, so much so that the adoption of technical indicators as utilized through
responsibilities which constitutes the inherent and implied standard for regularization. “comment cards” or “appraisal” tools should not be treated as a prerequisite for every
To echo the fundamental point of the Decision, if the probationary employee had been case of probationary engagement. In fact, even if a system of such kind is employed and
fully apprised by his employer of these duties and responsibilities, then basic knowledge the procedures for its implementation are not followed, once an employer determines
and common sense dictate that he must adequately perform the same, else he fails to pass that the probationary employee fails to meet the standards required for his
the probationary trial and may therefore be subject to termination. [8] regularization, the former is not precluded from dismissing the latter. The rule is that
when a valid cause for termination exists, the procedural infirmity attending the
The determination of “adequate performance” is not, in all cases, measurable by termination only warrants the payment of nominal damages. This was the principle laid
quantitative specification, such as that of a sales quota in Alcaraz’s example. It is also down in the landmark cases of Agabon v. NLRC[9] (Agabon) and Jaka Food Processing
hinged on the qualitative assessment of the employee’s work; by its nature, this largely Corporation v. Pacot[10] (Jaka). In the assailed Decision, the Court actually extended the
rests on the reasonable exercise of the employer’s management prerogative. While in application of the Agabon and Jaka rulings to breaches of company procedure,
some instances the standards used in measuring the quality of work may be conveyed – notwithstanding the employer’s compliance with the statutory requirements under the
such as workers who construct tangible products which follow particular metrics, not all Labor Code.[11] Hence, although Abbott did not comply with its own termination
standards of quality measurement may be reducible to hard figures or are readily procedure, its non-compliance thereof would not detract from the finding that there
articulable in specific pre-engagement descriptions. A good example would be the case of subsists a valid cause to terminate Alcaraz’s employment. Abbott, however, was
probationary employees whose tasks involve the application of discretion and intellect, penalized for its contractual breach and thereby ordered to pay nominal damages.
such as – to name a few – lawyers, artists, and journalists. In these kinds of occupation,
the best that the employer can do at the time of engagement is to inform the probationary As a final point, Alcaraz cannot take refuge in Aliling v. Feliciano[12] (Aliling) since the same
employee of his duties and responsibilities and to orient him on how to properly proceed is not squarely applicable to the case at bar. The employee in Aliling, a sales executive,
with the same. The employer cannot bear out in exacting detail at the beginning of the was belatedly informed of his quota requirement. Thus, considering the nature of his
engagement what he deems as “quality work” especially since the probationary employee position, the fact that he was not informed of his sales quota at the time of his
has yet to submit the required output. In the ultimate analysis, the communication of engagement changed the complexion of his employment. Contrarily, the nature of
performance standards should be perceived within the context of the nature of the Alcaraz’s duties and responsibilities as Regulatory Affairs Manager negates the
probationary employee’s duties and responsibilities. application of the foregoing. Records show that Alcaraz was terminated because she (a)
did not manage her time effectively; (b) failed to gain the trust of her staff and to build an
The same logic applies to a probationary managerial employee who is tasked to supervise effective rapport with them; (c) failed to train her staff effectively; and (d) was not able to
a particular department, as Alcaraz in this case. It is hardly possible for the employer, at obtain the knowledge and ability to make sound judgments on case processing and article
the time of the employee’s engagement, to map into technical indicators, or convey in review which were necessary for the proper performance of her duties. [13] Due to the
precise detail the quality standards by which the latter should effectively manage the nature and variety of these managerial functions, the best that Abbott could have done, at
department. Factors which gauge the ability of the managerial employee to either deal the time of Alcaraz’s engagement, was to inform her of her duties and responsibilities, the
with his subordinates (e.g., how to spur their performance, or command respect and adequate performance of which, to repeat, is an inherent and implied standard for
obedience from them), or to organize office policies, are hardly conveyable at the outset regularization; this is unlike the circumstance in Aliling where a quantitative
of the engagement since the employee has yet to be immersed into the work itself. Given regularization standard, in the term of a sales quota, was readily articulable to the
that a managerial role essentially connotes an exercise of discretion, the quality of employee at the outset. Hence, since the reasonableness of Alcaraz’s assessment clearly
effective management can only be determined through subsequent assessment. While at appears from the records, her termination was justified. Bear in mind that the quantum of
the time of engagement, reason dictates that the employer can only inform the proof which the employer must discharge is only substantial evidence which, as defined
probationary managerial employee of his duties and responsibilities as such and provide in case law, means that amount of relevant evidence as a reasonable mind might accept as
the allowable parameters for the same. Verily, as stated in the Decision, the adequate adequate to support a conclusion, even if other minds, equally reasonable, might
performance of such duties and responsibilities is, by and of itself, an implied standard of conceivably opine otherwise.[14] To the Court’s mind, this threshold of evidence Abbott

123
amply overcame in this case.
SECOND DIVISION
All told, the Court hereby denies the instant motion for reconsideration and thereby G.R. No. 204944-45, December 03, 2014
upholds the Decision in the main case. FUJI TELEVISION NETWORK, INC., PETITIONER, VS. ARLENE S. ESPIRITU,
RESPONDENT.
WHEREFORE, the motion for reconsideration dated August 23, 2013 of the Court’s
Decision dated July 23, 2013 in this case is hereby DENIED. DECISION
LEONEN, J.:
SO ORDERED.
It is the burden of the employer to prove that a person whose services it pays for is an
Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Abad, independent contractor rather than a regular employee with or without a fixed term.
Villarama, Jr., Perez, Mendoza, and Reyes,  JJ., concur. That a person has a disease does not per se entitle the employer to terminate his or her
Brion, J., see my dissent. services. Termination is the last resort. At the very least, a competent public health
Leonen, J., I join the dissent of J. Brion. authority must certify that the disease cannot be cured within six (6) months, even with
appropriate treatment.

We decide this petition for review[1] on certiorari filed by Fuji Television Network, Inc.,
seeking the reversal of the Court of Appeals’ decision [2] dated June 25, 2012, affirming
with modification the decision [3] of the National Labor Relations Commission.

In 2005, Arlene S. Espiritu (“Arlene”) was engaged by Fuji Television Network, Inc.
(“Fuji”) as a news correspondent/producer[4] “tasked to report Philippine news to Fuji
through its Manila Bureau field office.” [5] Arlene’s employment contract initially provided
for a term of one (1) year but was successively renewed on a yearly basis with salary
adjustment upon every renewal.[6]

Sometime in January 2009, Arlene was diagnosed with lung cancer. [7] She informed Fuji
about her condition. In turn, the Chief of News Agency of Fuji, Yoshiki Aoki, informed
Arlene “that the company will have a problem renewing her contract” [8] since it would be
difficult for her to perform her job.[9] She “insisted that she was still fit to work as certified
by her attending physician.”[10]

After several verbal and written communications,[11] Arlene and Fuji signed a non-
renewal contract on May 5, 2009 where it was stipulated that her contract would no
longer be renewed after its expiration on May 31, 2009. The contract also provided that
the parties release each other from liabilities and responsibilities under the employment
contract.[12]

In consideration of the non-renewal contract, Arlene “acknowledged receipt of the total

amount of US$18,050.00 representing her monthly salary from March 2009 to May 2009,
year-end bonus, mid-year bonus, and separation pay.” [13] However, Arlene affixed her
signature on the non-renewal contract with the initials “U.P.” for “under protest.” [14]

On May 6, 2009, the day after Arlene signed the non-renewal contract, she filed a
complaint for illegal dismissal and attorney’s fees with the National Capital Region

124
Arbitration Branch of the National Labor Relations Commission. She alleged that she was as News Producer without loss of seniority rights, and pay her backwages, 13th-month
forced to sign the non-renewal contract when Fuji came to know of her illness and that pay, mid-year and year-end bonuses, sick leave and vacation leave with pay until
Fuji withheld her salaries and other benefits for March and April 2009 when she refused reinstated, moral damages, exemplary damages, attorney’s fees, and legal interest of 12%
to sign.[15] per annum of the total monetary awards. [29]

Arlene claimed that she was left with no other recourse but to sign the non-renewal The Court of Appeals ruled that:
contract, and it was only upon signing that she was given her salaries and bonuses, in
addition to separation pay equivalent to four (4) years. [16] WHEREFORE, for lack of merit, the petition of Fuji Television Network, Inc. and Yoshiki
Aoki is DENIED and the petition of Arlene S. Espiritu is GRANTED. Accordingly, the
In the decision[17] dated September 10, 2009, Labor Arbiter Corazon C. Borbolla dismissed Decision dated March 5, 2010 of the National Labor Relations Commission, 6th Division
Arlene’s complaint.[18] Citing Sonza v. ABS-CBN[19] and applying the four-fold test, the in NLRC NCR Case No. 05-06811-09 and its subsequent Resolution dated April 26, 2010
Labor Arbiter held that Arlene was not Fuji’s employee but an independent contractor. [20] are hereby AFFIRMED with MODIFICATIONS, as follows:

Arlene appealed before the National Labor Relations Commission. In its decision dated Fuji Television, Inc. is hereby ORDERED to immediately REINSTATE Arlene S. Espiritu to
March 5, 2010, the National Labor Relations Commission reversed the Labor Arbiter’s her position as News Producer without loss of seniority rights and privileges and to pay
decision.[21] It held that Arlene was a regular employee with respect to the activities for her the following:
which she was employed since she continuously rendered services that were deemed
necessary and desirable to Fuji’s business.[22] The National Labor Relations Commission 1. Backwages at the rate of $1,900.00 per month computed from May 5, 2009 (the date of
ordered Fuji to pay Arlene backwages, computed from the date of her illegal dismissal. [23] dismissal), until reinstated;
The dispositive portion of the decision reads:
2. 13th Month Pay at the rate of $1,900.00 per annum from the date of dismissal, until
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the instant reinstated;
appeal. The Decision of the Labor Arbiter dated 19 September 2009 is hereby REVERSED
and SET ASIDE, and a new one is issued ordering respondents-appellees to pay 3. One and a half (1½) months pay or $2,850.00 as midyear bonus per year from the date
complainant-appellant backwages computed from the date of her illegal dismissal until of dismissal, until reinstated;
finality of this Decision.
4. One and a half (1½) months pay or $2,850.00 as year-end bonus per year from the date
SO ORDERED.[24] of dismissal, until reinstated;

Arlene and Fuji filed separate motions for reconsideration. [25] Both motions were denied 5. Sick leave of 30 days with pay or $1,900.00 per year from the date of dismissal, until
by the National Labor Relations Commission for lack of merit in the resolution dated reinstated; and
April 26, 2010.[26]
6. Vacation leave with pay equivalent to 14 days or $1,425.00 per annum from date of
From the decision of the National Labor Relations Commission, both parties filed dismissal, until reinstated.
separate petitions for certiorari [27] before the Court of Appeals. The Court of Appeals
consolidated the petitions and considered the following issues for resolution: 7. The amount of P100,000.00 as moral damages;

1) Whether or not Espiritu is a regular employee or a fixed-term contractual employee; 8. The amount of P50,000.00 as exemplary damages;

2) Whether or not Espiritu was illegally dismissed; and 9. Attorney’s fees equivalent to 10% of the total monetary awards herein stated; and
[28]
3) Whether or not Espiritu is entitled to damages and attorney’s fees. 10. Legal interest of twelve percent (12%) per annum of the total monetary awards
computed from May 5, 2009, until their full satisfaction.
In the assailed decision, the Court of Appeals affirmed the National Labor Relations
Commission with the modification that Fuji immediately reinstate Arlene to her position The Labor Arbiter is hereby DIRECTED to make another re-computation of the above

125
monetary awards consistent with the above directives. the manner by which she performed her functions.” [49] It was Arlene who insisted that
Fuji execute yearly fixed-term contracts so that she could negotiate for annual increases
SO ORDERED.[30] in her pay.[50]
Fuji points out that Arlene reported for work for only five (5) days in February 2009,
In arriving at the decision, the Court of Appeals held that Arlene was a regular employee three (3) days in March 2009, and one (1) day in April 2009. [51] Despite the provision in
because she was engaged to perform work that was necessary or desirable in the her employment contract that sick leaves in excess of 30 days shall not be paid, Fuji paid
business of Fuji,[31] and the successive renewals of her fixed-term contract resulted in Arlene her entire salary for the months of March, April, and May; four (4) months of
regular employment.[32] separation pay; and a bonus for two and a half months for a total of US$18,050.00. [52]
Despite having received the amount of US$18,050.00, Arlene still filed a case for illegal
According to the Court of Appeals, Sonza does not apply in order to establish that Arlene dismissal.[53]
was an independent contractor because she was not contracted on account of any
peculiar ability, special talent, or skill.[33] The fact that everything used by Arlene in her Fuji further argues that the circumstances would show that Arlene was not illegally
work was owned by Fuji negated the idea of job contracting. [34] dismissed. The decision to not renew her contract was mutually agreed upon by the
parties as indicated in Arlene’s e-mail[54] dated March 11, 2009 where she consented to
The Court of Appeals also held that Arlene was illegally dismissed because Fuji failed to the non-renewal of her contract but refused to sign anything. [55] Aoki informed Arlene in
comply with the requirements of substantive and procedural due process necessary for an e-mail[56] dated March 12, 2009 that she did not need to sign a resignation letter and
her dismissal since she was a regular employee. [35] that Fuji would pay Arlene’s salary and bonus until May 2009 as well as separation pay. [57]

The Court of Appeals found that Arlene did not sign the non-renewal contract voluntarily Arlene sent an e-mail dated March 18, 2009 with her version of the non-renewal
and that the contract was a mere subterfuge by Fuji to secure its position that it was her agreement that she agreed to sign this time.[58] This attached version contained a
choice not to renew her contract. She was left with no choice since Fuji was decided on provision that Fuji shall re-hire her if she was still interested to work for Fuji. [59] For Fuji,
severing her employment.[36] Arlene’s e-mail showed that she had the power to bargain.[60]

Fuji filed a motion for reconsideration that was denied in the resolution [37] dated Fuji then posits that the Court of Appeals erred when it held that the elements of an
December 7, 2012 for failure to raise new matters. [38] employer-employee relationship are present, particularly that of control; [61] that Arlene’s
separation from employment upon the expiration of her contract constitutes illegal
Aggrieved, Fuji filed this petition for review and argued that the Court of Appeals erred in dismissal;[62] that Arlene is entitled to reinstatement; [63] and that Fuji is liable to Arlene for
affirming with modification the National Labor Relations Commission’s decision, holding damages and attorney’s fees.[64]
that Arlene was a regular employee and that she was illegally dismissed. Fuji also
questioned the award of monetary claims, benefits, and damages.[39] This petition for review on certiorari under Rule 45 was filed on February 8, 2013. [65] On
February 27, 2013, Arlene filed a manifestation [66] stating that this court may not take
Fuji points out that Arlene was hired as a stringer, and it informed her that she would jurisdiction over the case since Fuji failed to authorize Corazon E. Acerden to sign the
remain one.[40] She was hired as an independent contractor as defined in Sonza.[41] Fuji verification.[67] Fuji filed a comment on the manifestation [68] on March 9, 2013.
had no control over her work.[42] The employment contracts were executed and renewed
annually upon Arlene’s insistence to which Fuji relented because she had skills that Based on the arguments of the parties, there are procedural and substantive issues for
distinguished her from ordinary employees.[43] Arlene and Fuji dealt on equal terms when resolution:
they negotiated and entered into the employment contracts. [44] There was no illegal
dismissal because she freely agreed not to renew her fixed-term contract as evidenced by Whether the petition for review should be dismissed as Corazon E. Acerden,
her e-mail correspondences with Yoshiki Aoki.[45] In fact, the signing of the non-renewal the signatory of the verification and certification of non-forum shopping of the
contract was not necessary to terminate her employment since “such employment petition, had no authority to sign the verification and certification on behalf of
terminated upon expiration of her contract.” [46] Finally, Fuji had dealt with Arlene in good Fuji;
faith, thus, she should not have been awarded damages. [47]
Whether the Court of Appeals correctly determined that no grave abuse of
Fuji alleges that it did not need a permanent reporter since the news reported by Arlene discretion was committed by the National Labor Relations Commission when it
could easily be secured from other entities or from the internet. [48] Fuji “never controlled ruled that Arlene was a regular employee, not an independent contractor, and

126
 that she was illegally dismissed; and under oath in the complaint or other initiatory pleading asserting a claim for relief or in a
sworn certification annexed thereto and simultaneously filed therewith: (a) that he has
Whether the Court of Appeals properly modified the National Labor Relations not theretofore commenced any action or filed any claim involving the same issues in any
Commission’s decision by awarding reinstatement, damages, and attorney’s court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other
fees. action or claim is pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should thereafter learn
The petition should be dismissed. that the same or similar action or claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to the court wherein his aforesaid complaint or
I initiatory pleading has been filed.
Validity of the verification and certification against forum shopping
Failure to comply with the foregoing requirements shall not be curable by mere
In its comment on Arlene’s manifestation, Fuji alleges that Corazon was authorized to amendment of the complaint or other initiatory pleading but shall be cause for the
sign the verification and certification of non-forum shopping because Mr. Shuji Yano was dismissal of the case without prejudice, unless otherwise provided, upon motion and
empowered under the secretary’s certificate to delegate his authority to sign the after hearing. The submission of a false certification or non-compliance with any of the
necessary pleadings, including the verification and certification against forum shopping. undertakings therein shall constitute indirect contempt of court, without prejudice to the
[69]
corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for
On the other hand, Arlene points out that the authority given to Mr. Shuji Yano and Mr. Jin summary dismissal with prejudice and shall constitute direct contempt, as well as a cause
Eto in the secretary’s certificate is only for the petition for certiorari before the Court of for administrative sanctions.
Appeals.[70] Fuji did not attach any board resolution authorizing Corazon or any other
person to file a petition for review on certiorari with this court. [71] Shuji Yano and Jin Eto Section 4(e) of Rule 45[74] requires that petitions for review should “contain a sworn
could not re-delegate the power that was delegated to them. [72] In addition, the special certification against forum shopping as provided in the last paragraph of section 2, Rule
power of attorney executed by Shuji Yano in favor of Corazon indicated that she was 42.” Section 5 of the same rule provides that failure to comply with any requirement in
empowered to sign on behalf of Shuji Yano, and not on behalf of Fuji. [73] Section 4 is sufficient ground to dismiss the petition.

The Rules of Court requires the

submission of verification and Effects of non-compliance
certification against forum shopping
Uy v. Landbank[75] discussed the effect of non-compliance with regard to verification and
Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the requirement of stated that:
verification, while Section 5 of the same rule provides the requirement of certification
against forum shopping. These sections state: [t]he requirement regarding verification of a pleading is formal, not jurisdictional. Such
requirement is simply a condition affecting the form of pleading, the non-compliance of
SEC. 4. Verification. — Except when otherwise specifically required by law or rule, which does not necessarily render the pleading fatally defective. Verification is simply
pleadings need not be under oath, verified or accompanied by affidavit. intended to secure an assurance that the allegations in the pleading are true and correct
and not the product of the imagination or a matter of speculation, and that the pleading is
A pleading is verified by an affidavit that the affiant has read the pleading and that the filed in good faith. The court may order the correction of the pleading if the verification is
allegations therein are true and correct of his knowledge and belief. lacking or act on the pleading although it is not verified, if the attending circumstances
are such that strict compliance with the rules may be dispensed with in order that the
A pleading required to be verified which contains a verification based on “information ends of justice may thereby be served.[76] (Citations omitted)
and belief,” or upon “knowledge, information and belief,” or lacks a proper verification,
shall be treated as an unsigned pleading. Shipside Incorporated v. Court of Appeals[77] cited the discussion in Uy and differentiated
its effect from non-compliance with the requirement of certification against forum
SEC. 5. Certification against forum shopping.— The plaintiff or principal party shall certify shopping:

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On the other hand, the lack of certification against forum shopping is generally not 1 A distinction must be made between non-compliance with the requirement on or
curable by the submission thereof after the filing of the petition. Section 5, Rule 45 of the submission of defective verification, and non-compliance with the requirement on
1997 Rules of Civil Procedure provides that the failure of the petitioner to submit the or submission of defective certification against forum shopping.
required documents that should accompany the petition, including the certification 2 As to verification, non-compliance therewith or a defect therein does not
against forum shopping, shall be sufficient ground for the dismissal thereof. The same necessarily render the pleading fatally defective. The court may order its
rule applies to certifications against forum shopping signed by a person on behalf of a submission or correction or act on the pleading if the attending circumstances are
corporation which are unaccompanied by proof that said signatory is authorized to file a such that strict compliance with the Rule may be dispensed with in order that the
petition on behalf of the corporation.[78] (Emphasis supplied) ends of justice may be served thereby.
3 Verification is deemed substantially complied with when one who has ample
Effects of substantial compliance knowledge to swear to the truth of the allegations in the complaint or petition signs
with the requirement of verification the verifcation, and when matters alleged in the petition have been made in good
and certification against forum shopping faith or are true and correct.
4 As to certification against forum shopping, non-compliance therewith or a defect
Although the general rule is that failure to attach a verification and certification against therein, unlike in verification, is generally not curable by its subsequent submission
forum shopping is a ground for dismissal, there are cases where this court allowed or correction thereof, unless there is a need to relax the Rule on the ground of
substantial compliance. “substantial compliance” or presence of “special circumstances or compelling
reasons.”
In Loyola v. Court of Appeals,[79] petitioner Alan Loyola submitted the required 5 The certification against forum shopping must be signed by all the plaintiffs or
certification one day after filing his electoral protest. [80] This court considered the ) petitioners in a case; otherwise, those who did not sign will be dropped as parties to
subsequent filing as substantial compliance since the purpose of filing the certification is the case. Under reasonable or justifiable circumstances, however, as when all the
to curtail forum shopping.[81] plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against
In LDP Marketing, Inc. v. Monter,[82] Ma. Lourdes Dela Peñ a signed the verification and forum shopping substantially complies with the Rule.
certification against forum shopping but failed to attach the board resolution indicating 6 Finally, the certification against forum shopping must be executed by the party-
her authority to sign.[83] In a motion for reconsideration, LDP Marketing attached the ) pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
secretary’s certificate quoting the board resolution that authorized Dela Peñ a.[84] Citing party-pleader is unable to sign, he must execute a Special Power of Attorney
Shipside, this court deemed the belated submission as substantial compliance since LDP designating his counsel of record to sign on his behalf.[92]
Marketing complied with the requirement; what it failed to do was to attach proof of Dela
Peñ a’s authority to sign.[85] There was substantial compliance
by Fuji Television Network, Inc.
Havtor Management Phils., Inc. v. National Labor Relations Commission [86] and General
Milling Corporation v. National Labor Relations Commission [87] involved petitions that Being a corporation, Fuji exercises its power to sue and be sued through its board of
were dismissed for failure to attach any document showing that the signatory on the directors or duly authorized officers and agents. Thus, the physical act of signing the
verification and certification against forum-shopping was authorized. [88] In both cases, the verification and certification against forum shopping can only be done by natural persons
secretary’s certificate was attached to the motion for reconsideration. [89] This court duly authorized either by the corporate by-laws or a board resolution. [93]
considered the subsequent submission of proof indicating authority to sign as substantial
compliance.[90] In its petition for review on certiorari, Fuji attached Hideaki Ota’s secretary’s certificate,
[94]
authorizing Shuji Yano and Jin Eto to represent and sign for and on behalf of Fuji. [95]
Altres v. Empleo[91] summarized the rules on verification and certification against forum The secretary’s certificate was duly authenticated [96] by Sulpicio Confiado, Consul-General
shopping in this manner: of the Philippines in Japan. Likewise attached to the petition is the special power of
attorney executed by Shuji Yano, authorizing Corazon to sign on his behalf. [97] The
For the guidance of the bench and bar, the Court restates in capsule form the verification and certification against forum shopping was signed by Corazon. [98]
jurisprudential pronouncements . . . respecting non-compliance with the requirement on,
or submission of defective, verification and certification against forum shopping: Arlene filed the manifestation dated February 27, 2013, arguing that the petition for

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review should be dismissed because Corazon was not duly authorized to sign the states:
verification and certification against forum shopping.
That I, SHUJI YANO, of legal age, Japanese national, with office address at 2-4-8 Daiba,
Fuji filed a comment on Arlene’s manifestation, stating that Corazon was properly Minato-Ku, Tokyo, 137-8088 Japan, and being the representative of Fuji TV, INc., [sic]
authorized to sign. On the basis of the secretary’s certificate, Shuji Yano was empowered (evidenced by the attached Secretary’s Certificate) one of the respondents in NLRC-NCR
to delegate his authority. Case No. 05-06811-00 entitled “Arlene S. Espiritu v. Fuji Television Network, Inc./Yoshiki
Aoki”, and subsequently docketed before the Court of Appeals as C.A. G.R. S.P. No. 114867
Quoting the board resolution dated May 13, 2010, the secretary's certificate states: (Consolidated with SP No. 114889) do hereby make, constitute and appoint Ms. Ma.
Corazon E. Acerden and Mr. Moises A. Rollera as my true and lawful attorneys-in-fact
(a) The Corporation shall file a Petition for Certiorari with the Court of Appeals, against for me and my name, place and stead to act and represent me in the above-mentioned
Philippines’ National Labor Relations Commission (“NLRC”) and Arlene S. Espiritu, case, with special power to make admission/s and stipulations and/or to make and
pertaining to NLRC-NCR Case No. LAC 00-002697-09, RAB No. 05-06811-00 and submit as well as to accept and approve compromise proposals upon such terms and
entitled “Arlene S. Espiritu v. Fuji Television Network, Inc./Yoshiki Aoki”, and conditions and under such covenants as my attorney-in-fact may deem fit, and to engage
participate in any other subsequent proceeding that may necessarily arise therefrom, the services of Villa Judan and Cruz Law Offices as the legal counsel to represent the
including but not limited to the filing of appeals in the appropriate venue; Company in the Supreme Court;

(b) Mr. Shuji Yano and Mr. Jin Eto be authorized, as they are hereby authorized, to The said Attorneys-in-Fact are hereby further authorized to make, sign, execute and
verify and execute the certification against non-forum shopping which may be necessary deliver such papers or documents as may be necessary in furtherance of the power thus
or required to be attached to any pleading to [sic] submitted to the Court of Appeals; and granted, particularly to sign and execute the verification and certification of non-forum
the authority to so verify and certify for the Corporation in favor of the said persons shall shopping needed to be filed.[101] (Emphasis in the original)
subsist and remain effective until the termination of the said case;
In its comment[102] on Arlene’s manifestation, Fuji argues that Shuji Yano could further
.... delegate his authority because the board resolution empowered him to “act in the
Corporation’s name, place and stead to determine, propose, agree, decided [sic], do and
(d) Mr. Shuji Yano and Mr. Jin Eto be authorized, as they are hereby authorized, to perform any and all of the following: . . . such other matters as may aid in the prompt
represent and appear on behalf the [sic] Corporation in all stages of the [sic] this case and disposition of the action.”[103]
in any other proceeding that may necessarily arise thereform [sic], and to act in the
Corporation’s name, place and stead to determine, propose, agree, decide, do, and To clarify, Fuji attached a verification and certification against forum shopping, but
perform any and all of the following: Arlene questions Corazon’s authority to sign. Arlene argues that the secretary’s certificate
empowered Shuji Yano to file a petition for certiorari before the Court of Appeals, and not
The possibility of amicable settlement or of submission to alternative mode of a petition for review before this court, and that since Shuji Yano’s authority was
dispute resolution; delegated to him, he could not further delegate such power. Moreover, Corazon was
representing Shuji Yano in his personal capacity, and not in his capacity as representative
The simplification of the issue; of Fuji.

The necessity or desirability of amendments to the pleadings; A review of the board resolution quoted in the secretary’s certificate shows that Fuji shall
“file a Petition for Certiorari with the Court of Appeals”[104] and “participate in any other
The possibility of obtaining stipulation or admission of facts and documents; subsequent proceeding that may necessarily arise therefrom, including but not limited to
and the filing of appeals in the appropriate venue,”[105] and that Shuji Yano and Jin Eto are
authorized to represent Fuji “in any other proceeding that may necessarily arise thereform
Such other matters as may aid in the prompt disposition of the action. [99] [sic].”[106] As pointed out by Fuji, Shuji Yano and Jin Eto were also authorized to “act in the
(Emphasis in the original; Italics omitted) Corporation’s name, place and stead to determine, propose, agree, decide, do, and perform
any and all of the following: . . . 5. Such other matters as may aid in the prompt disposition
Shuji Yano executed a special power of attorney appointing Ms. Ma. Corazon E. Acerden of the action.”[107]
and Mr. Moises A. Rollera as his attorneys-in-fact. [100] The special power of attorney

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Considering that the subsequent proceeding that may arise from the petition for Thus, Fuji substantially complied with the requirements of verification and certification
certiorari with the Court of Appeals is the filing of a petition for review with this court, against forum shopping.
Fuji substantially complied with the procedural requirement.
Before resolving the substantive issues in this case, this court will discuss the procedural
On the issue of whether Shuji Yano validly delegated his authority to Corazon, Article parameters of a Rule 45 petition for review in labor cases.
1892 of the Civil Code of the Philippines states:
II
ART. 1892. The agent may appoint a substitute if the principal has not prohibited him Procedural parameters of petitions for review in labor cases
from doing so; but he shall be responsible for the acts of the substitute:
Article 223 of the Labor Code[115] does not provide any mode of appeal for decisions of the
(1) When he was not given the power to appoint one; National Labor Relations Commission. It merely states that “[t]he decision of the
Commission shall be final and executory after ten (10) calendar days from receipt thereof
(2) When he was given such power, but without designating the person, and the person by the parties.” Being final, it is no longer appealable. However, the finality of the National
appointed was notoriously incompetent or insolvent. Labor Relations Commission’s decisions does not mean that there is no more recourse for
the parties.
All acts of the substitute appointed against the prohibition of the principal shall be void.
In St. Martin Funeral Home v. National Labor Relations Commission, [116] this court cited
The secretary’s certificate does not state that Shuji Yano is prohibited from appointing a several cases[117] and rejected the notion that this court had no jurisdiction to review
substitute. In fact, he is empowered to do acts that will aid in the resolution of this case. decisions of the National Labor Relations Commission. It stated that this court had the
power to review the acts of the National Labor Relations Commission to see if it kept
This court has recognized that there are instances when officials or employees of a within its jurisdiction in deciding cases and also as a form of check and balance. [118] This
corporation can sign the verification and certification against forum shopping without a court then clarified that judicial review of National Labor Relations Commission decisions
board resolution. In Cagayan Valley Drug Corporation v. CIR,[108] it was held that: shall be by way of a petition for certiorari under Rule 65. Citing the doctrine of hierarchy
of courts, it further ruled that such petitions shall be filed before the Court of Appeals.
In sum, we have held that the following officials or employees of the company can sign From the Court of Appeals, an aggrieved party may file a petition for review on certiorari
the verification and certification without need of a board resolution: (1) the Chairperson under Rule 45.
of the Board of Directors, (2) the President of a corporation, (3) the General Manager or
Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a A petition for certiorari under Rule 65 is an original action where the issue is limited to
labor case. grave abuse of discretion. As an original action, it cannot be considered as a continuation
of the proceedings of the labor tribunals.
While the above cases[109] do not provide a complete listing of authorized signatories to
the verification and certification required by the rules, the determination of the On the other hand, a petition for review on certiorari under Rule 45 is a mode of appeal
sufficiency of the authority was done on a case to case basis. The rationale applied in the where the issue is limited to questions of law. In labor cases, a Rule 45 petition is limited
foregoing cases is to justify the authority of corporate officers or representatives of the to reviewing whether the Court of Appeals correctly determined the presence or absence
corporation to sign the verification or certificate against forum shopping, being ‘in a of grave abuse of discretion and deciding other jurisdictional errors of the National Labor
position to verify the truthfulness and correctness of the allegations in the petition.’ [110] Relations Commission.[119]

Corazon’s affidavit[111] states that she is the “office manager and resident interpreter of the In Odango v. National Labor Relations Commission,[120] this court explained that a petition
Manila Bureau of Fuji Television Network, Inc.”[112] and that she has “held the position for for certiorari is an extraordinary remedy that is “available only and restrictively in truly
the last twenty-three years.”[113] exceptional cases”[121] and that its sole office “is the correction of errors of jurisdiction
including commission of grave abuse of discretion amounting to lack or excess of
As the office manager for 23 years, Corazon can be considered as having knowledge of all jurisdiction.”[122] A petition for certiorari does not include a review of findings of fact since
matters in Fuji’s Manila Bureau Office and is in a position to verify “the truthfulness and the findings of the National Labor Relations Commission are accorded finality. [123] In cases
the correctness of the allegations in the Petition.” [114] where the aggrieved party assails the National Labor Relations Commission’s findings, he
or she must be able to show that the Commission “acted capriciously and whimsically or

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in total disregard of evidence material to the controversy.” [124] review, this Court must deny the petition if it finds that the CA correctly acted. [133]
(Emphasis in the original)
When a decision of the Court of Appeals under a Rule 65 petition is brought to this court
by way of a petition for review under Rule 45, only questions of law may be decided These parameters shall be used in resolving the substantive issues in this petition.
upon. As held in Meralco Industrial v. National Labor Relations Commission:[125]
III
This Court is not a trier of facts. Well-settled is the rule that the jurisdiction of this Court Determination of employment status; burden of proof
in a petition for review on certiorari under Rule 45 of the Revised Rules of Court is
limited to reviewing only errors of law, not of fact, unless the factual findings complained In this case, there is no question that Arlene rendered services to Fuji. However, Fuji
of are completely devoid of support from the evidence on record, or the assailed alleges that Arlene was an independent contractor, while Arlene alleges that she was a
judgment is based on a gross misapprehension of facts. Besides, factual findings of quasi- regular employee. To resolve this issue, we ascertain whether an employer-employee
judicial agencies like the NLRC, when affirmed by the Court of Appeals, are conclusive relationship existed between Fuji and Arlene.
upon the parties and binding on this Court.[126]
This court has often used the four-fold test to determine the existence of an employer-
Career Philippines v. Serna,[127] citing Montoya v. Transmed,[128] is instructive on the employee relationship. Under the four-fold test, the “control test” is the most important.
[134]
parameters of judicial review under Rule 45: As to how the elements in the four-fold test are proven, this court has discussed that:

As a rule, only questions of law may be raised in a Rule 45 petition. In one case, we [t]here is no hard and fast rule designed to establish the aforesaid elements. Any
discussed the particular parameters of a Rule 45 appeal from the CA’s Rule 65 decision on competent and relevant evidence to prove the relationship may be admitted.
a labor case, as follows: Identification cards, cash vouchers, social security registration, appointment letters or
In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast employment contracts, payrolls, organization charts, and personnel lists, serve as
with the review for jurisdictional error that we undertake under Rule 65. Furthermore, evidence of employee status.[135]
Rule 45 limits us to the review of questions of law raised against the assailed CA decision.
In ruling for legal correctness, we have to view the CA decision in the same context that If the facts of this case vis-à -vis the four-fold test show that an employer-employee
the petition for certiorari it ruled upon was presented to it; we have to examine the CA relationship existed, we then determine the status of Arlene’s employment, i.e., whether
decision from the prism of whether it correctly determined the presence or absence of grave she was a regular employee. Relative to this, we shall analyze Arlene’s fixed-term contract
abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC and determine whether it supports her argument that she was a regular employee, or the
decision on the merits of the case was correct. In other words, we have to be keenly aware argument of Fuji that she was an independent contractor. We shall scrutinize whether the
that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision nature of Arlene’s work was necessary and desirable to Fuji’s business or whether Fuji
challenged before it.[129] (Emphasis in the original) only needed the output of her work. If the circumstances show that Arlene’s work was
necessary and desirable to Fuji, then she is presumed to be a regular employee. The
Justice Brion’s dissenting opinion in Abott Laboratories, PhiIippines v. AIcaraz[130] burden of proving that she was an independent contractor lies with Fuji.
discussed that in petitions for review under Rule 45, “the Court simply determines
whether the legal correctness of the CA’s finding that the NLRC ruling . . . had basis in fact In labor cases, the quantum of proof required is substantial evidence. [136] “Substantial
and in Iaw.”[131] In this kind of petition, the proper question to be raised is, “Did the CA evidence” has been defined as “such amount of relevant evidence which a reasonable
correctly determine whether the NLRC committed grave abuse of discretion in mind might accept as adequate to justify a conclusion.” [137]
ruling on the case?”[132]
If Arlene was a regular employee, we then determine whether she was illegally dismissed.
Justice Brion’s dissenting opinion also laid down the following guidelines: In complaints for illegal dismissal, the burden of proof is on the employee to prove the
fact of dismissal.[138] Once the employee establishes the fact of dismissal, supported by
If the NLRC ruling has basis in the evidence and the applicable law and jurisprudence, substantial evidence, the burden of proof shifts to the employer to show that there was a
then no grave abuse of discretion exists and the CA should so declare and, accordingly, just or authorized cause for the dismissal and that due process was observed. [139]
dismiss the petition. If grave abuse of discretion exists, then the CA must grant the
petition and nullify the NLRC ruling, entering at the same time the ruling that is justified IV
under the evidence and the governing law, rules and jurisprudence. In our Rule 45

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Whether the Court of Appeals correctly affirmed the National Labor Relations
Commission’s finding that Arlene was a regular employee An employment shall be deemed to be casual if it is not covered by the preceding
paragraph; Provided, That, any employee who has rendered at least one year of service,
Fuji alleges that Arlene was an independent contractor, citing Sonza v. ABS-CBN and whether such service is continuous or broken, shall be considered a regular employee
relying on the following facts: (1) she was hired because of her skills; (2) her salary was with respect to the activity in which he is employed and his employment shall continue
US$1,900.00, which is higher than the normal rate; (3) she had the power to bargain with while such activity exist.
her employer; and (4) her contract was for a fixed term. According to Fuji, the Court of
Appeals erred when it ruled that Arlene was forced to sign the non-renewal agreement, This provision classifies employees into regular, project, seasonal, and casual. It further
considering that she sent an email with another version of the non-renewal agreement. classifies regular employees into two kinds: (1) those “engaged to perform activities
[140]
Further, she is not entitled to moral damages and attorney’s fees because she acted in which are usually necessary or desirable in the usual business or trade of the employer”;
bad faith when she filed a labor complaint against Fuji after receiving US$18,050.00 and (2) casual employees who have “rendered at least one year of service, whether such
representing her salary and other benefits.[141] service is continuous or broken.”

Arlene argues that she was a regular employee because Fuji had control and supervision Another classification of employees, i.e., employees with fixed-term contracts, was
over her work. The news events that she covered were all based on the instructions of recognized in Brent School, Inc. v. Zamora[150] where this court discussed that:
Fuji.[142] She maintains that the successive renewal of her employment contracts for four
(4) years indicates that her work was necessary and desirable. [143] In addition, Fuji’s Logically, the decisive determinant in the term employment should not be the activities
payment of separation pay equivalent to one (1) month’s pay per year of service indicates that the employee is called upon to perform, but the day certain agreed upon by the
that she was a regular employee.[144] To further support her argument that she was not an parties for the commencement and termination of their employment relationship, a day
independent contractor, she states that Fuji owns the laptop computer and mini-camera certain being understood to be “that which must necessarily come, although it may not be
that she used for work.[145] known when.”[151] (Emphasis in the original)

Arlene also argues that Sonza is not applicable because she was a plain reporter for Fuji, This court further discussed that there are employment contracts where “a fixed term is
unlike Jay Sonza who was a news anchor, talk show host, and who enjoyed a celebrity an essential and natural appurtenance”[152] such as overseas employment contracts and
status.[146] officers in educational institutions.[153]

On her illness, Arlene points out that it was not a ground for her dismissal because her Distinctions among fixed-term
attending physician certified that she was fit to work. [147] employees, independent contractors,
and regular employees
Arlene admits that she signed the non-renewal agreement with quitclaim, not because
she agreed to its terms, but because she was not in a position to reject the non-renewal GMA Network, Inc. v. Pabriga[154] expounded the doctrine on fixed-term contracts laid
agreement. Further, she badly needed the salary withheld for her sustenance and down in Brent in the following manner:
medication.[148] She posits that her acceptance of separation pay does not bar filing of a
complaint for illegal dismissal. [149] Cognizant of the possibility of abuse in the utilization of fixed-term employment
contracts, we emphasized in Brent that where from the circumstances it is apparent that
Article 280 of the Labor Code provides that: the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down as contrary to public policy or morals. We thus
Art. 280. Regular and casual employment. The provisions of written agreement to the laid down indications or criteria under which “term employment” cannot be said to be in
contrary notwithstanding and regardless of the oral agreement of the parties, an circumvention of the law on security of tenure, namely:
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade 1) The fixed period of employment was knowingly and voluntarily agreed upon by the
of the employer, except where the employment has been fixed for a specific project or parties without any force, duress, or improper pressure being brought to bear upon the
undertaking the completion or termination of which has been determined at the time of employee and absent any other circumstances vitiating his consent; or
the engagement of the employee or where the work or services to be performed is 2) It satisfactorily appears that the employer and the employee dealt with each other on
seasonal in nature and the employment is for the duration of the season. more or less equal terms with no moral dominance exercised by the former or the latter.

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These indications, which must be read together, make the Brent doctrine applicable only In view of the “distinct and independent business” of independent contractors, no
in a few special cases wherein the employer and employee are on more or less in equal employer-employee relationship exists between independent contractors and their
footing in entering into the contract. The reason for this is evident: when a prospective principals.
employee, on account of special skills or market forces, is in a position to make demands
upon the prospective employer, such prospective employee needs less protection than Independent contractors are recognized under Article 106 of the Labor Code:
the ordinary worker. Lesser limitations on the parties’ freedom of contract are thus
required for the protection of the employee. [155] (Citations omitted) Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract
with another person for the performance of the former’s work, the employees of the
For as long as the guidelines laid down in Brent are satisfied, this court will recognize the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the
validity of the fixed-term contract. provisions of this Code.

In Labayog v. M.Y. San Biscuits, Inc.,[156] this court upheld the fixed-term employment of ....
petitioners because from the time they were hired, they were informed that their
engagement was for a specific period. This court stated that: The Secretary of Labor and Employment may, by appropriate regulations, restrict or
prohibit the contracting-out of labor to protect the rights of workers established under
[s]imply put, petitioners were not regular employees. While their employment as mixers, this Code. In so prohibiting or restricting, he may make appropriate distinctions between
packers and machine operators was necessary and desirable in the usual business of labor-only contracting and job contracting as well as differentiations within these types
respondent company, they were employed temporarily only, during periods when there of contracting and determine who among the parties involved shall be considered the
was heightened demand for production. Consequently, there could have been no illegal employer for purposes of this Code, to prevent any violation or circumvention of any
dismissal when their services were terminated on expiration of their contracts. There provision of this Code.
was even no need for notice of termination because they knew exactly when their
contracts would end. Contracts of employment for a fixed period terminate on their own There is “labor-only” contracting where the person supplying workers to an employer
at the end of such period. does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by
Contracts of employment for a fixed period are not unlawful. What is objectionable is the such person are performing activities which are directly related to the principal business
practice of some scrupulous employers who try to circumvent the law protecting workers of such employer. In such cases, the person or intermediary shall be considered merely as
from the capricious termination of employment.[157] (Citation omitted) an agent of the employer who shall be responsible to the workers in the same manner
and extent as if the latter were directly employed by him.
Caparoso v. Court of Appeals[158] upheld the validity of the fixed-term contract of
employment. Caparoso and Quindipan were hired as delivery men for three (3) months. In Department Order No. 18-A, Series of 2011, of the Department of Labor and
At the end of the third month, they were hired on a monthly basis. In total, they were Employment, a contractor is defined as having:
hired for five (5) months. They filed a complaint for illegal dismissal. [159] This court ruled
that there was no evidence indicating that they were pressured into signing the fixed- Section 3. . . .
term contracts. There was likewise no proof that their employer was engaged in hiring
workers for five (5) months only to prevent regularization. In the absence of these facts, ....
the fixed-term contracts were upheld as valid.[160]
(c) . . . an arrangement whereby a principal agrees to put out or farm out with a
On the other hand, an independent contractor is defined as: contractor the performance or completion of a specific job, work or service within a
definite or predetermined period, regardless of whether such job, work or service is to be
. . . one who carries on a distinct and independent business and undertakes to perform performed or completed within or outside the premises of the principal.
the job, work, or service on its own account and under one’s own responsibility according
to one’s own manner and method, free from the control and direction of the principal in This department order also states that there is a trilateral relationship in legitimate job
all matters connected with the performance of the work except as to the results thereof. contracting and subcontracting arrangements among the principal, contractor, and
[161]
employees of the contractor. There is no employer-employee relationship between the
contractor and principal who engages the contractor’s services, but there is an employer-

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employee relationship between the contractor and workers hired to accomplish the work regulation because they are impressed with public interest. Article XIII, Section 3 of the
for the principal.[162] 1987 Constitution provides full protection to labor:

Jurisprudence has recognized another kind of independent contractor: individuals with Article XIII. Social Justice and Human Rights
unique skills and talents that set them apart from ordinary employees. There is no
trilateral relationship in this case because the independent contractor himself or herself ....
performs the work for the principal. In other words, the relationship is bilateral.
Labor
In Orozco v. Court of Appeals,[163] Wilhelmina Orozco was a columnist for the Philippine
Daily Inquirer. This court ruled that she was an independent contractor because of her Section 3. The State shall afford full protection to labor, local and overseas, organized and
“talent, skill, experience, and her unique viewpoint as a feminist advocate.” [164] In unorganized, and promote full employment and equality of employment opportunities
addition, the Philippine Daily Inquirer did not have the power of control over Orozco, and for all.
she worked at her own pleasure. [165]
It shall guarantee the rights of all workers to self-organization, collective bargaining and
Semblante v. Court of Appeals[166] involved a masiador[167] and a sentenciador.[168] This court negotiations, and peaceful concerted activities, including the right to strike in accordance
ruled that “petitioners performed their functions as masiador and sentenciador free from with law. They shall be entitled to security of tenure, humane conditions of work, and a
the direction and control of respondents” [169] and that the masiador and sentenciador living wage. They shall also participate in policy and decision-making processes affecting
“relied mainly on their ‘expertise that is characteristic of the cockfight gambling.’” [170] their rights and benefits as may be provided by law.
Hence, no employer-employee relationship existed.
The State shall promote the principle of shared responsibility between workers and
Bernarte v. Philippine Basketball Association [171] involved a basketball referee. This court employers and the preferential use of voluntary modes in settling disputes, including
ruled that “a referee is an independent contractor, whose special skills and independent conciliation, and shall enforce their mutual compliance therewith to foster industrial
judgment are required specifically for such position and cannot possibly be controlled by peace.
the hiring party.”[172]
The State shall regulate the relations between workers and employers, recognizing the
In these cases, the workers were found to be independent contractors because of their right of labor to its just share in the fruits of production and the right of enterprises to
unique skills and talents and the lack of control over the means and methods in the reasonable returns on investments, and to expansion and growth.
performance of their work.
Apart from the constitutional guarantee of protection to labor, Article 1700 of the Civil
In other words, there are different kinds of independent contractors: those engaged in Code states:
legitimate job contracting and those who have unique skills and talents that set them
apart from ordinary employees. ART. 1700. The relations between capital and labor are not merely contractual. They are
so impressed with public interest that labor contracts must yield to the common good.
Since no employer-employee relationship exists between independent contractors and Therefore, such contracts are subject to the special laws on labor unions, collective
their principals, their contracts are governed by the Civil Code provisions on contracts bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor
and other applicable laws.[173] and similar subjects.

A contract is defined as “a meeting of minds between two persons whereby one binds In contracts of employment, the employer and the employee are not on equal footing.
himself, with respect to the other, to give something or to render some service.” [174] Thus, it is subject to regulatory review by the labor tribunals and courts of law. The law
Parties are free to stipulate on terms and conditions in contracts as long as these “are not serves to equalize the unequal. The labor force is a special class that is constitutionally
contrary to law, morals, good customs, public order, or public policy.” [175] This protected because of the inequality between capital and labor. [176] This presupposes that
presupposes that the parties to a contract are on equal footing. They can bargain on the labor force is weak.
terms and conditions until they are able to reach an agreement.
However, the level of protection to labor should vary from case to case; otherwise, the
On the other hand, contracts of employment are different and have a higher level of state might appear to be too paternalistic in affording protection to labor. As stated in

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GMA Network, Inc. v. Pabriga, the ruling in Brent applies in cases where it appears that the wield that power.[183] (Citation omitted)
employer and employee are on equal footing.[177] This recognizes the fact that not all
workers are weak. To reiterate the discussion in GMA Network v. Pabriga: Orozco v. Court of Appeals further elucidated the meaning of “power of control” and stated
the following:
The reason for this is evident: when a prospective employee, on account of special skills
or market forces, is in a position to make demands upon the prospective employer, such Logically, the line should be drawn between rules that merely serve as guidelines
prospective employee needs less protection than the ordinary worker. Lesser limitations towards the achievement of the mutually desired result without dictating the means or
on the parties’ freedom of contract are thus required for the protection of the employee. methods to be employed in attaining it, and those that control or fix the methodology and
[178]
bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second, which
The level of protection to labor must be determined on the basis of the nature of the address both the result and the means used to achieve it. . . . [184] (Citation omitted)
work, qualifications of the employee, and other relevant circumstances.
In Locsin, et al. v. Philippine Long Distance Telephone Company, [185] the “power of control”
For example, a prospective employee with a bachelor’s degree cannot be said to be on was defined as “[the] right to control not only the end to be achieved but also the means to
equal footing with a grocery bagger with a high school diploma. Employees who qualify be used in reaching such end.” [186]
for jobs requiring special qualifications such as “[having] a Master’s degree” or “[having]
passed the licensure exam” are different from employees who qualify for jobs that Here, the Court of Appeals applied Sonza v. ABS-CBN and Dumpit-Murillo v. Court of
require “[being a] high school graduate; with pleasing personality.” In these situations, it Appeals[187] in determining whether Arlene was an independent contractor or a regular
is clear that those with special qualifications can bargain with the employer on equal employee.
footing. Thus, the level of protection afforded to these employees should be different.
In deciding Sonza and Dumpit-Murillo, this court used the four-fold test. Both cases
Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is involved newscasters and anchors. However, Sonza was held to be an independent
contradictory. Employees under fixed-term contracts cannot be independent contractors contractor, while Dumpit-Murillo was held to be a regular employee.
because in fixed-term contracts, an employer-employee relationship exists. The test in
this kind of contract is not the necessity and desirability of the employee’s activities, “but Comparison of the Sonza and
the day certain agreed upon by the parties for the commencement and termination of the Dumpit-Murillo cases using
employment relationship.”[179] For regular employees, the necessity and desirability of the four-fold test
their work in the usual course of the employer’s business are the determining factors. On
the other hand, independent contractors do not have employer-employee relationships Sonza was engaged by ABS-CBN in view of his “unique skills, talent and celebrity status
with their principals. not possessed by ordinary employees.” [188] His work was for radio and television
programs.[189] On the other hand, Dumpit-Murillo was hired by ABC as a newscaster and
Hence, before the status of employment can be determined, the existence of an employer- co-anchor.[190]
employee relationship must be established.
Sonza’s talent fee amounted to P317,000.00 per month, which this court found to be a
The four-fold test[180] can be used in determining whether an employer-employee substantial amount that indicated he was an independent contractor rather than a
relationship exists. The elements of the four-fold test are the following: (1) the selection regular employee.[191] Meanwhile, Dumpit-Murillo’s monthly salary was P28,000.00, a
and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; very low amount compared to what Sonza received. [192]
and (4) the power of control, which is the most important element.[181]
Sonza was unable to prove that ABS-CBN could terminate his services apart from breach
The “power of control” was explained by this court in Corporal, Sr. v. National Labor of contract. There was no indication that he could be terminated based on just or
Relations Commission:[182] authorized causes under the Labor Code. In addition, ABS-CBN continued to pay his talent
fee under their agreement, even though his programs were no longer broadcasted. [193]
The power to control refers to the existence of the power and not necessarily to the Dumpit-Murillo was found to have been illegally dismissed by her employer when they
actual exercise thereof, nor is it essential for the employer to actually supervise the did not renew her contract on her fourth year with ABC.[194]
performance of duties of the employee. It is enough that the employer has the right to

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In Sonza, this court ruled that ABS-CBN did not control how Sonza delivered his lines,
how he appeared on television, or how he sounded on radio. [195] All that Sonza needed Arlene was a regular employee
was his talent.[196] Further, “ABS-CBN could not terminate or discipline SONZA even if the with a fixed-term contract
means and methods of performance of his work . . . did not meet ABS-CBN’s approval.” [197]
In Dumpit-Murillo, the duties and responsibilities enumerated in her contract was a clear The test for determining regular employment is whether there is a reasonable connection
indication that ABC had control over her work.[198] between the employee’s activities and the usual business of the employer. Article 280
provides that the nature of work must be “necessary or desirable in the usual business or
Application of the four-fold test trade of the employer” as the test for determining regular employment. As stated in ABS-
CBN Broadcasting Corporation v. Nazareno:[204]
The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo and
affirmed the ruling of the National Labor Relations Commission finding that Arlene was a In determining whether an employment should be considered regular or non-regular, the
regular employee. Arlene was hired by Fuji as a news producer, but there was no showing applicable test is the reasonable connection between the particular activity performed by
that she was hired because of unique skills that would distinguish her from ordinary the employee in relation to the usual business or trade of the employer. The standard,
employees. Neither was there any showing that she had a celebrity status. Her monthly supplied by the law itself, is whether the work undertaken is necessary or desirable in the
salary amounting to US$1,900.00 appears to be a substantial sum, especially if compared usual business or trade of the employer, a fact that can be assessed by looking into the
to her salary when she was still connected with GMA. [199] Indeed, wages may indicate nature of the services rendered and its relation to the general scheme under which the
whether one is an independent contractor. Wages may also indicate that an employee is business or trade is pursued in the usual course. It is distinguished from a specific
able to bargain with the employer for better pay. However, wages should not be the undertaking that is divorced from the normal activities required in carrying on the
conclusive factor in determining whether one is an employee or an independent particular business or trade.[205]
contractor.
However, there may be a situation where an employee’s work is necessary but is not
Fuji had the power to dismiss Arlene, as provided for in paragraph 5 of her professional always desirable in the usual course of business of the employer. In this situation, there is
employment contract.[200] Her contract also indicated that Fuji had control over her work no regular employment.
because she was required to work for eight (8) hours from Monday to Friday, although on
flexible time.[201] Sonza was not required to work for eight (8) hours, while Dumpit- In San Miguel Corporation v. National Labor Relations Commission,[206] Francisco de
Murillo had to be in ABC to do both on-air and off-air tasks. Guzman was hired to repair furnaces at San Miguel Corporation’s Manila glass plant. He
had a separate contract for every furnace that he repaired. He filed a complaint for illegal
On the power to control, Arlene alleged that Fuji gave her instructions on what to report. dismissal three (3) years after the end of his last contract. [207] In ruling that de Guzman
[202]
Even the mode of transportation in carrying out her functions was controlled by Fuji. did not attain the status of a regular employee, this court explained:
Paragraph 6 of her contract states:
Note that the plant where private respondent was employed for only seven months is
4 During the travel to carry out work, if there is change of place or change of place of engaged in the manufacture of glass, an integral component of the packaging and
work, the train, bus, or public transport shall be used for the trip. If the manufacturing business of petitioner. The process of manufacturing glass requires a
Employee uses the private car during the work and there is an accident the furnace, which has a limited operating life. Petitioner resorted to hiring project or fixed
Employer shall not be responsible for the damage, which may be caused to the term employees in having said furnaces repaired since said activity is not regularly
Employee.[203] performed. Said furnaces are to be repaired or overhauled only in case of need and after
being used continuously for a varying period of five (5) to ten (10) years.
Thus, the Court of Appeals did not err when it upheld the findings of the National Labor
Relations Commission that Arlene was not an independent contractor. In 1990, one of the furnaces of petitioner required repair and upgrading. This was an
undertaking distinct and separate from petitioner's business of manufacturing glass. For
Having established that an employer-employee relationship existed between Fuji and this purpose, petitioner must hire workers to undertake the said repair and upgrading. . . .
Arlene, the next questions for resolution are the following: Did the Court of Appeals
correctly affirm the National Labor Relations Commission that Arlene had become a ....
regular employee? Was the nature of Arlene’s work necessary and desirable for Fuji’s
usual course of business? Clearly, private respondent was hired for a specific project that was not within the

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regular business of the corporation. For petitioner is not engaged in the business of because fixed-term contracts of employment are strictly construed. [222] Further, the pieces
repairing furnaces. Although the activity was necessary to enable petitioner to continue of equipment Arlene used were all owned by Fuji, showing that she was a regular
manufacturing glass, the necessity therefor arose only when a particular furnace reached employee and not an independent contractor. [223]
the end of its life or operating cycle. Or, as in the second undertaking, when a particular
furnace required an emergency repair. In other words, the undertakings where private The Court of Appeals likewise cited Dumpit-Murillo, which involved fixed-term contracts
respondent was hired primarily as helper/bricklayer have specified goals and purposes that were successively renewed for four (4) years. [224] This court held that “[t]his repeated
which are fulfilled once the designated work was completed. Moreover, such engagement under contract of hire is indicative of the necessity and desirability of the
undertakings were also identifiably separate and distinct from the usual, ordinary or petitioner’s work in private respondent ABC’s business.” [225]
regular business operations of petitioner, which is glass manufacturing. These
undertakings, the duration and scope of which had been determined and made known to With regard to Fuji’s argument that Arlene’s contract was for a fixed term, the Court of
private respondent at the time of his employment, clearly indicated the nature of his Appeals cited Philips Semiconductors, Inc. v. Fadriquela [226] and held that where an
employment as a project employee. [208] employee’s contract “had been continuously extended or renewed to the same position,
with the same duties and remained in the employ without any interruption,” [227] then such
Fuji is engaged in the business of broadcasting,[209] including news programming.[210] It is employee is a regular employee. The continuous renewal is a scheme to prevent
based in Japan[211] and has overseas offices to cover international news. [212] regularization. On this basis, the Court of Appeals ruled in favor of Arlene.

Based on the record, Fuji’s Manila Bureau Office is a small unit [213] and has a few As stated in Price, et al. v. Innodata Corp., et al.:[228]
employees.[214] As such, Arlene had to do all activities related to news gathering. Although
Fuji insists that Arlene was a stringer, it alleges that her designation was “News The employment status of a person is defined and prescribed by law and not by what the
Talent/Reporter/Producer.”[215] parties say it should be. Equally important to consider is that a contract of employment is
impressed with public interest such that labor contracts must yield to the common good.
A news producer “plans and supervises newscast . . . [and] work[s] with reporters in the Thus, provisions of applicable statutes are deemed written into the contract, and the
field planning and gathering information. . . .”[216] Arlene’s tasks included “[m]onitoring parties are not at liberty to insulate themselves and their relationships from the impact of
and [g]etting [n]ews [s]tories, [r]eporting interviewing subjects in front of a video labor laws and regulations by simply contracting with each other. [229] (Citations omitted)
camera,”[217] “the timely submission of news and current events reports pertaining to the
Philippines[,] and traveling [sic] to [Fuji’s] regional office in Thailand.” [218] She also had to Arlene’s contract indicating a fixed term did not automatically mean that she could never
report for work in Fuji’s office in Manila from Mondays to Fridays, eight (8) hours per be a regular employee. This is precisely what Article 280 seeks to avoid. The ruling in
day.[219] She had no equipment and had to use the facilities of Fuji to accomplish her tasks. Brent remains as the exception rather than the general rule.

The Court of Appeals affirmed the finding of the National Labor Relations Commission Further, an employee can be a regular employee with a fixed-term contract. The law does
that the successive renewals of Arlene’s contract indicated the necessity and desirability not preclude the possibility that a regular employee may opt to have a fixed-term
of her work in the usual course of Fuji’s business. Because of this, Arlene had become a contract for valid reasons. This was recognized in Brent: For as long as it was the
regular employee with the right to security of tenure.[220] The Court of Appeals ruled that: employee who requested, or bargained, that the contract have a “definite date of
termination,” or that the fixed-term contract be freely entered into by the employer and
Here, Espiritu was engaged by Fuji as a stinger [sic] or news producer for its Manila the employee, then the validity of the fixed-term contract will be upheld. [230]
Bureau. She was hired for the primary purpose of news gathering and reporting to the
television network’s headquarters. Espiritu was not contracted on account of any V
peculiar ability or special talent and skill that she may possess which the network desires Whether the Court of Appeals correctly affirmed
to make use of. Parenthetically, if it were true that Espiritu is an independent contractor, the National Labor Relations Commission’s finding of illegal dismissal
as claimed by Fuji, the fact that everything that she uses to perform her job is owned by
the company including the laptop computer and mini camera discounts the idea of job Fuji argues that the Court of Appeals erred when it held that Arlene was illegally
contracting.[221] dismissed, in view of the non-renewal contract voluntarily executed by the parties. Fuji
also argues that Arlene’s contract merely expired; hence, she was not illegally dismissed.
[231]
Moreover, the Court of Appeals explained that Fuji’s argument that no employer-
employee relationship existed in view of the fixed-term contract does not persuade

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Arlene alleges that she had no choice but to sign the non-renewal contract because Fuji
withheld her salary and benefits. Even probationary employees are entitled to the right to security of tenure. This was
explained in Philippine Daily Inquirer, Inc. v. Magtibay, Jr.:[233]
With regard to this issue, the Court of Appeals held:
Within the limited legal six-month probationary period, probationary employees are still
We cannot subscribe to Fuji’s assertion that Espiritu’s contract merely expired and that entitled to security of tenure. It is expressly provided in the afore-quoted Article 281 that
she voluntarily agreed not to renew the same. Even a cursory perusal of the subject Non- a probationary employee may be terminated only on two grounds: (a) for just cause, or
Renewal Contract readily shows that the same was signed by Espiritu under protest. (b) when he fails to qualify as a regular employee in accordance with reasonable
What is apparent is that the Non-Renewal Contract was crafted merely as a subterfuge to standards made known by the employer to the employee at the time of his engagement.
secure Fuji’s position that it was Espiritu’s choice not to renew her contract. [232] [234]
(Citation omitted)

As a regular employee, Arlene was entitled to security of tenure and could be dismissed The expiration of Arlene’s contract does not negate the finding of illegal dismissal by Fuji.
only for just or authorized causes and after the observance of due process. The manner by which Fuji informed Arlene that her contract would no longer be renewed
is tantamount to constructive dismissal. To make matters worse, Arlene was asked to
The right to security of tenure is guaranteed under Article XIII, Section 3 of the 1987 sign a letter of resignation prepared by Fuji.[235] The existence of a fixed-term contract
Constitution: should not mean that there can be no illegal dismissal. Due process must still be observed
in the pre-termination of fixed-term contracts of employment.
Article XIII. Social Justice and Human Rights
In addition, the Court of Appeals and the National Labor Relations Commission found that
.... Arlene was dismissed because of her health condition. In the non-renewal agreement
executed by Fuji and Arlene, it is stated that:
Labor
WHEREAS, the SECOND PARTY is undergoing chemotherapy which prevents her from
.... continuing to effectively perform her functions under the said Contract such as the timely
submission of news and current events reports pertaining to the Philippines and
It shall guarantee the rights of all workers to self-organization, collective bargaining and travelling [sic] to the FIRST PARTY’s regional office in Thailand. [236] (Emphasis supplied)
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and Disease as a ground for termination is recognized under Article 284 of the Labor Code:
a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law. Art. 284. Disease as ground for termination. An employer may terminate the services
of an employee who has been found to be suffering from any disease and whose
Article 279 of the Labor Code also provides for the right to security of tenure and states continued employment is prohibited by law or is prejudicial to his health as well as to the
the following: health of his co-employees: Provided, That he is paid separation pay equivalent to at least
one (1) month salary or to one-half (1/2) month salary for every year of service,
Art. 279. Security of tenure. In cases of regular employment, the employer shall not whichever is greater, a fraction of at least six (6) months being considered as one (1)
terminate the services of an employee except for a just cause of when authorized by this whole year.
Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor Code provides:
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the Sec. 8. Disease as a ground for dismissal. – Where the employee suffers from a disease and
time of his actual reinstatement. his continued employment is prohibited by law or prejudicial to his health or to the
health of his co-employees, the employer shall not terminate his employment unless
Thus, on the right to security of tenure, no employee shall be dismissed, unless there are there is a certification by a competent public health authority that the disease is of such
just or authorized causes and only after compliance with procedural and substantive due nature or at such a stage that it cannot be cured within a period of six (6) months even
process is conducted. with proper medical treatment. If the disease or ailment can be cured within the period,

138
the employer shall not terminate the employee but shall ask the employee to take a leave. terminate the services of an employee except for a just cause or when authorized by this
The employer shall reinstate such employee to his former position immediately upon the Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
restoration of his normal health. without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
For dismissal under Article 284 to be valid, two requirements must be complied with: (1) his compensation was withheld from him up to the time of his actual reinstatement.
the employee’s disease cannot be cured within six (6) months and his “continued (Emphasis supplied)
employment is prohibited by law or prejudicial to his health as well as to the health of his
co-employees”; and (2) certification issued by a competent public health authority that The Court of Appeals’ modification of the National Labor Relations Commission’s decision
even with proper medical treatment, the disease cannot be cured within six (6) months. was proper because the law itself provides that illegally dismissed employees are entitled
[237]
The burden of proving compliance with these requisites is on the employer. [238] Non- to reinstatement, backwages including allowances, and all other benefits.
compliance leads to the conclusion that the dismissal was illegal.[239]
On reinstatement, the National Labor Relations Commission ordered payment of
There is no evidence showing that Arlene was accorded due process. After informing her separation pay in lieu of reinstatement, reasoning “that the filing of the instant suit may
employer of her lung cancer, she was not given the chance to present medical certificates. have seriously abraded the relationship of the parties so as to render reinstatement
Fuji immediately concluded that Arlene could no longer perform her duties because of impractical.”[242] The Court of Appeals reversed this and ordered reinstatement on the
chemotherapy. It did not ask her how her condition would affect her work. Neither did it ground that separation pay in lieu of reinstatement is allowed only in several instances
suggest for her to take a leave, even though she was entitled to sick leaves. Worse, it did such as (1) when the employer has ceased operations; (2) when the employee’s position
not present any certificate from a competent public health authority. What Fuji did was to is no longer available; (3) strained relations; and (4) a substantial period has lapsed from
inform her that her contract would no longer be renewed, and when she did not agree, date of filing to date of finality.[243]
her salary was withheld. Thus, the Court of Appeals correctly upheld the finding of the
National Labor Relations Commission that for failure of Fuji to comply with due process, On this matter, Quijano v. Mercury Drug Corp.[244] is instructive:
Arlene was illegally dismissed. [240]
Well-entrenched is the rule that an illegally dismissed employee is entitled to
VI reinstatement as a matter of right. . . .
Whether the Court of Appeals properly modified
the National Labor Relations Commission’s decision To protect labor’s security of tenure, we emphasize that the doctrine of “strained
when it awarded reinstatement, damages, and attorney’s fees relations” should be strictly applied so as not to deprive an illegally dismissed employee
of his right to reinstatement. Every labor dispute almost always results in “strained
The National Labor Relations Commission awarded separation pay in lieu of relations” and the phrase cannot be given an overarching interpretation, otherwise, an
reinstatement, on the ground that the filing of the complaint for illegal dismissal may unjustly dismissed employee can never be reinstated. [245] (Citations omitted)
have seriously strained relations between the parties. Backwages were also awarded, to
be computed from date of dismissal until the finality of the National Labor Relations The Court of Appeals reasoned that strained relations are a question of fact that must be
Commission’s decision. However, only backwages were included in the dispositive supported by evidence.[246] No evidence was presented by Fuji to prove that
portion because the National Labor Relations Commission recognized that Arlene had reinstatement was no longer feasible. Fuji did not allege that it ceased operations or that
received separation pay in the amount of US$7,600.00. Arlene’s position was no longer available. Nothing in the records shows that Arlene’s
reinstatement would cause an atmosphere of antagonism in the workplace. Arlene filed
The Court of Appeals affirmed the National Labor Relations Commission’s decision but her complaint in 2009. Five (5) years are not yet a substantial period [247] to bar
modified it by awarding moral and exemplary damages and attorney’s fees, and all other reinstatement.
benefits Arlene was entitled to under her contract with Fuji. The Court of Appeals also
ordered reinstatement, reasoning that the grounds when separation pay was awarded in On the award of damages, Fuji argues that Arlene is not entitled to the award of damages
lieu of reinstatement were not proven. [241] and attorney’s fees because the non-renewal agreement contained a quitclaim, which
Arlene signed.
Article 279 of the Labor Code provides:
Quitclaims in labor cases do not bar illegally dismissed employees from filing labor
Art. 279. Security of tenure. In cases of regular employment, the employer shall not complaints and money claim. As explained by Arlene, she signed the non-renewal

139
agreement out of necessity. In Land and Housing Development Corporation v. Esquillo, [248] fees is legally and morally justifiable.” [255] Due to her illegal dismissal, Arlene was forced
this court explained: to litigate.

We have heretofore explained that the reason why quitclaims are commonly frowned In the dispositive portion of its decision, the Court of Appeals awarded legal interest at
upon as contrary to public policy, and why they are held to be ineffective to bar claims for the rate of 12% per annum.[256] In view of this court’s ruling in Nacar v. Gallery Frames,[257]
the full measure of the workers’ legal rights, is the fact that the employer and the the legal interest shall be reducd to a rate of 6% per annum from July 1, 2013 until full
employee obviously do not stand on the same footing. The employer drove the employee satisfaction.
to the wall. The latter must have to get hold of money. Because, out of a job, he had to face
the harsh necessities of life. He thus found himself in no position to resist money WHEREFORE, the petition is DENIED. The assailed Court of Appeals decision dated June
proffered. His, then, is a case of adherence, not of choice. [249] 25, 2012 is AFFIRMED with the modification that backwages shall be computed from
June 2009. Legal interest shall be computed at the rate of 6% per annum of the total
With regard to the Court of Appeals’ award of moral and exemplary damages and monetary awards from May 5, 2009 until full satisfaction.
attorney’s fees, this court has recognized in several cases that moral damages are
awarded “when the dismissal is attended by bad faith or fraud or constitutes an act SO ORDERED.
oppressive to labor, or is done in a manner contrary to good morals, good customs or
public policy.” [250] On the other hand, exemplary damages may be awarded when the Carpio, (Chairperson), Del Castillo, Mendoza, and Villarama, Jr.,* JJ., concur.
dismissal was effected “in a wanton, oppressive or malevolent manner.” [251]

The Court of Appeals and National Labor Relations Commission found that after Arlene
had informed Fuji of her cancer, she was informed that there would be problems in
renewing her contract on account of her condition. This information caused Arlene
mental anguish, serious anxiety, and wounded feelings that can be gleaned from the tenor
of her email dated March 11, 2009. A portion of her email reads:

I WAS SO SURPRISED . . . that at a time when I am at my lowest, being sick and very weak,
you suddenly came to deliver to me the NEWS that you will no longer renew my contract.
I knew this will come but I never thought that you will be so ‘heartless’ and insensitive to
deliver that news just a month after I informed you that I am sick. I was asking for
patience and understanding and your response was not to RENEW my contract. [252]

Apart from Arlene’s illegal dismissal, the manner of her dismissal was effected in an
oppressive approach with her salary and other benefits being withheld until May 5, 2009,
when she had no other choice but to sign the non-renewal contract. Thus, there was legal
basis for the Court of Appeals to modify the National Labor Relations Commission’s
decision.

However, Arlene received her salary for May 2009. [253] Considering that the date of her
illegal dismissal was May 5, 2009,[254] this amount may be subtracted from the total
monetary award.

With regard to the award of attorney’s fees, Article 111 of the Labor Code states that “[i]n
cases of unlawful withholding of wages, the culpable party may be assessed attorney’s
fees equivalent to ten percent of the amount of wages recovered.” Likewise, this court has
recognized that “in actions for recovery of wages or where an employee was forced to
litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s

140
 retirement pay of Zenaida M. Paz [was] ?12,487.50.” [17]
SECOND DIVISION
G.R. No. 199554, February 18, 2015 The National Labor Relations Commission in its Decision [18] dated December 8, 2008
ZENAIDA PAZ, PETITIONER, VS. NORTHERN TOBACCO REDRYING CO., INC., AND/OR modified the Labor Arbiter’s Decision.  It likewise denied reconsideration.  The Decision’s
ANGELO ANG, RESPONDENTS. dispositive portion reads:

DECISION WHEREFORE, premises considered, the decision of the labor arbiter is hereby
LEONEN, J.: MODIFIED.  Complainant Appellant Zenaida Paz[’s] retirement pay should be computed
pursuant to RA 7641 and that all the months she was engaged to work for respondent for
Zenaida Paz filed this Petition[1] praying that “the computation of Petitioner’s Retirement the last twenty eight (28) years should be added and divide[d] by six (for a fraction of six
Pay as determined by the National Labor Relations Commission in its Decision dated 08 months is considered as one year) to get the number of years [for] her retirement pay[.] 
December 2008 be reinstated.”[2] Complainant Teresa Lopez is hereby entitled to her separation pay computed at one half
month pay for every year of service, a fraction of six months shall be considered as one
Northern Tobacco Redrying Co., Inc. (NTRCI), a flue-curing and redrying of tobacco leaves year, plus backwages from the time she was illegally dismissed up to the filing of her
business,[3] employs approximately 100 employees with seasonal workers “tasked to sort, complaint.
process, store and transport tobacco leaves during the tobacco season of March to
September.”[4] The rest of the decision stays.

NTRCI hired Zenaida Paz (Paz) sometime in 1974 as a seasonal sorter, paid P185.00 SO ORDERED.[19]
daily.  NTRCI regularly re-hired her every tobacco season since then.  She signed a
seasonal job contract at the start of her employment and a pro-forma application letter The Court of Appeals in its Decision [20] dated May 25, 2011 dismissed the Petition and
prepared by NTRCI in order to qualify for the next season. [5] modified the National Labor Relations Commission’s Decision in that “financial assistance
is awarded to . . . Zenaida Paz in the amount of P60,356.25”: [21]
On May 18, 2003,[6] Paz was 63 years old when NTRCI informed her that she was
considered retired under company policy. [7]  A year later, NTRCI told her she would WHEREFORE, the Petition is hereby DISMISSED.  The Decision dated 8 December 2008
receive P12,000.00 as retirement pay. [8] and Resolution dated 16 September 2009 of the National Labor Relations Commission in
NLRC CA No. 046642-05(5) are MODIFIED in that (1) financial assistance is awarded to
Paz, with two other complainants, filed a Complaint for illegal dismissal against NTRCI on private respondent Zenaida Paz in the amount of P60,356.25; and (2) the dismissal of
March 4, 2004.[9]  She amended her Complaint on April 27, 2004 into a Complaint for private respondent Teresa Lopez is declared illegal, and thus, she is awarded backwages
payment of retirement benefits, damages, and attorney’s fees[10] as P12,000.00 seemed and separation pay, in accordance with the foregoing discussion.
inadequate for her 29 years of service.[11]  The Complaint impleaded NTRCI’s Plant
Manager, Angelo Ang, as respondent. [12]  The Complaint was part of the consolidated SO ORDERED.[22]
Complaints of 17 NTRCI workers. [13]
The Court of Appeals found that while applying the clear text of Article 287 resulted in
NTRCI countered that no Collective Bargaining Agreement (CBA) existed between NTRCI the amount of P12,487.50 as retirement pay, “this amount [was] so meager that it could
and its workers.  Thus, it computed the retirement pay of its seasonal workers based on hardly support . . . Paz, now that she is weak and old, unable to find employment.” [23]  It
Article 287 of the Labor Code.[14] discussed jurisprudence on financial assistance and deemed it appropriate to apply the
formula:  One-half-month pay multiplied by 29 years of service divided by two yielded
NTRCI raised the requirement of at least six months of service a year for that year to be P60,356.25 as Paz’s retirement pay. [24]
considered in the retirement pay computation.  It claimed that Paz only worked for at
least six months in 1995, 1999, and 2000 out of the 29 years she rendered service.  Thus, Paz comes before this court seeking to reinstate the National Labor Relations
Paz’s retirement pay amounted to P12,487.50 after multiplying her ?185.00 daily salary Commission’s computation.[25]  NTRCI filed its Comment,[26] and this court deemed waived
by 22½ working days in a month, for three years.[15] the filing of a Reply.[27]

The Labor Arbiter in his Decision [16] dated July 26, 2005 “[c]onfirm[ed] that the correct Petitioner Paz contends that respondent NTRCI failed to prove the alleged company

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policy on compulsory retirement for employees who reached 60 years of age or who
rendered 30 years of service, whichever came first. [28]  Consequently, Article 287, as Jurisprudence also recognizes the status of regular seasonal employees. [40]
amended by Republic Act No. 7641,[29] applies and entitles her to “retirement pay . . .
equivalent to [at least] one-half month salary for every year of service, a fraction of at Mercado, Sr. v. National Labor Relations Commission[41] did not consider as regular
least six (6) months being considered as one whole year.” [30]  She adds that she was then employees the rice and sugar farmland workers who were paid with daily wages.   This
63 years old, and while one may opt to retire at 60 years old, the compulsory retirement was anchored on the Labor Arbiter’s findings that “petitioners were required to perform
age is 65 years old under Article 287, as amended. [31] phases of agricultural work for a definite period, after which their services [were]
available to any farm owner.”[42]
Petitioner Paz then argues respondent NTRCI’s misplaced reliance on Philippine Tobacco
Flue-Curing & Redrying Corp. v. National Labor Relations Commission [32] as that case This court explained that the proviso in the second paragraph of Article 280 in that “any
involved separation pay computation. [33] employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee” applies only to “casual”
Lastly, petitioner Paz contends lack of legal basis that “an employee should have at least employees and not “project” and regular employees in the first paragraph of Article 280.
[43]
worked for six (6) months for a particular season for that season to be included in the
computation of retirement pay[.]” [34]  She submits that regular seasonal employees are
still considered employees during off-season, and length of service determination should On the other hand, the workers of La Union Tobacco Redrying Corporation in Abasolo v.
be applied in retiree’s favor.[35] National Labor Relations Commission[44] were considered regular seasonal employees
since they performed services necessary and indispensable to the business for over 20
Respondent NTRCI counters that in retirement pay computation this court should years, even if their work was only during tobacco season. [45]  This court applied the test
consider its ruling in Philippine Tobacco on computing separation pay of seasonal laid down in De Leon v. National Labor Relations Commission[46] for determining regular
employees.  It submits that the proviso “a fraction of at least six (6) months being employment status:
considered as one (1) whole year” appears in both Article 287 on retirement pay and [T]he test of whether or not an employee is a regular employee has been laid down in De
Articles 283 and 284 on separation pay. [36] Leon v. NLRC, in which this Court held:
The primary standard, therefore, of determining regular employment is the reasonable
Respondent NTRCI argues that unlike regular employees, seasonal workers like connection between the particular activity performed by the employee in relation to the
petitioner Paz can offer their services to other employers during off-season.  Thus, the usual trade or business of the employer.  The test is whether the former is usually
six-month rule avoids the situation where seasonal workers receive retirement pay twice necessary or desirable in the usual business or trade of the employer.  The connection can
— an even more favorable position compared with regular employees. [37] be determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety.  Also if the employee has been
Both parties appear to agree on petitioner Paz’s entitlement to retirement pay.  The issue performing the job for at least a year, even if the performance is not continuous and
before this court involves its proper computation.  We also resolve whether there was merely intermittent, the law deems repeated and continuing need for its performance as
illegal dismissal. sufficient evidence of the necessity if not indispensability of that activity to the business. 
Hence, the employment is considered regular, but only with respect to such activity, and
We affirm the Court of Appeals’ decision with modification. while such activity exists.
Thus, the nature of one’s employment does not depend solely on the will or word of the
Regular seasonal employees employer.  Nor on the procedure for hiring and the manner of designating the employee,
but on the nature of the activities to be performed by the employee, considering the
Article 280[38] of the Labor Code and jurisprudence identified three types of employees, employer's nature of business and the duration and scope of work to be done.
namely: “(1) regular employees or those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer; In the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as
(2) project employees or those whose employment has been fixed for a specific project or petitioners have served the company for many years, some for over 20 years, performing
undertaking, the completion or termination of which has been determined at the time of services necessary and indispensable to LUTORCO’s business, serve as badges of regular
the engagement of the employee or where the work or service to be performed is employment.  Moreover, the fact that petitioners do not work continuously for one whole
seasonal in nature and the employment is for the duration of the season; and (3) casual year but only for the duration of the tobacco season does not detract from considering them
employees or those who are neither regular nor project employees.” [39] in regular employment since in a litany of cases this Court has already settled that

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seasonal workers who are called to work from time to time and are temporarily laid off considerations taken together allowed the conclusion that petitioner Paz was a regular
during off-season are not separated from service in said period, but are merely seasonal employee, entitled to rights under Article 279 [53] of the Labor Code:
considered on leave until re-employed.
Art. 279. Security of Tenure.  In cases of regular employment, the employer shall not
Private respondent's reliance on the case of Mercado v. NLRC is misplaced considering terminate the services of an employee except for a just cause or when authorized by this
that since in said case of Mercado, although the respondent company therein consistently Title.  An employee who is unjustly dismissed from work shall be entitled to
availed of the services of the petitioners therein from year to year, it was clear that reinstatement without loss of seniority rights and other privileges and to his full
petitioners therein were not in respondent company's regular employ.  Petitioners backwages, inclusive of allowances, and to his other benefits or their monetary
therein performed different phases of agricultural work in a given year.  However, during equivalent computed from the time his compensation was withheld from him up to the
that period, they were free to contract their services to work for other farm owners, as in time of his actual reinstatement.
fact they did.  Thus, the Court ruled in that case that their employment would naturally
end upon the completion of each project or phase of farm work for which they have been Illegal dismissal and backwages
contracted.[47] (Emphasis supplied, citations omitted)
Petitioner Paz initially filed a Complaint for illegal dismissal seeking separation pay, but
The sugarcane workers in Hacienda Fatima v. National Federation of Sugarcane Workers- later amended her Complaint into one for payment of retirement pay. [54]  Despite the
Food and General Trade[48] were also considered as regular employees since they amendment, she maintained in her subsequent pleadings that she had been made to
performed the same tasks every season for several years: retire even before she reached the compulsory retirement age of 65 under Article 287, as
amended.[55]
For respondents to be excluded from those classified as regular employees, it is not
enough that they perform work or services that are seasonal in nature.  They must have Petitioner Paz alleged that respondent NTRCI required her to report on March 18, 2003
also been employed only for the duration of one season. . . . Evidently, petitioners for the 2003 tobacco season, but she suffered a mild stroke sometime in April. 
employed respondents for more than one season.  Therefore, the general rule of regular Nevertheless, respondent NTRCI extended her employment contract until May 18, 2003
employment is applicable. when she was informed that she was retired under company policy. [56]

.... Since petitioner Paz was “unlearned and not knowledgeable in law, [she] just accepted
such fact and waited to be paid her separation/retirement benefit as promised by . . .
The CA did not err when it ruled that Mercado v. NLRC was not applicable to the case at NTRCI.”[57]  Unfortunately, after a year of waiting, respondent NTRCI only offered her
bar.  In the earlier case, the workers were required to perform phases of agricultural around P12,000.00 for all her services since 1974. [58]
work for a definite period of time, after which their services would be available to any
other farm owner.  They were not hired regularly and repeatedly for the same phase/s of The National Labor Relations Commission recognized that like the other complainants
agricultural work, but on and off for any single phase thereof.  On the other hand, herein against respondent NTRCI, petitioner Paz “was at a loss in what cause of action to take —
respondents, having performed the same tasks for petitioners every season for several whether illegal dismissal or payment of retirement pay.” [59]
years, are considered the latter’s regular employees for their respective tasks.  Petitioners’
eventual refusal to use their services — even if they were ready, able and willing to Petitioner Paz’s amendment of her Complaint was not fatal to her cause of action for
perform their usual duties whenever these were available — and hiring of other workers illegal dismissal.
to perform the tasks originally assigned to respondents amounted to illegal dismissal of
the latter.[49]  (Emphasis supplied, citation omitted) First, petitioner Paz never abandoned her argument that she had not reached the
compulsory retirement age of 65 pursuant to Article 287, as amended, when respondent
[50]
Respondent NTRCI engaged the services of petitioner Paz as a seasonal sorter and had NTRCI made her retire on May 18, 2003.
been regularly rehired from 1974, [51] until she was informed in 2003 that she was being Second, the National Labor Relations Commission found that respondent NTRCI failed to
retired under company policy.[52] prove a valid company retirement policy, yet it required its workers to retire after they
had reached the age of 60. [60]  The Court of Appeals also discussed that while respondent
The services petitioner Paz performed as a sorter were necessary and indispensable to NTRCI produced guidelines on its retirement policy for seasonal employees, it never
respondent NTRCI’s business of flue-curing and redrying tobacco leaves.  She was also submitted a copy of its Collective Bargaining Agreement and even alleged in its Position
regularly rehired as a sorter during the tobacco seasons for 29 years since 1974.  These Paper that none existed.[61]

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 cause requires payment of separation pay.  When the termination of employment is
Petitioner Paz was only 63 years old on May 18, 2003 with two more years remaining declared illegal, reinstatement and full backwages are mandated under Article 279.  If
before she would reach the compulsory retirement age of 65. reinstatement is no longer possible where the dismissal was unjust, separation pay may
be granted.
“Retirement is the result of a bilateral act of the parties, a voluntary agreement between
the employer and the employee whereby the latter, after reaching a certain age, agrees to Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer
sever his or her employment with the former.”[62]  Article 287, as amended, allows for must give the employee two written notices and a hearing or opportunity to be heard if
optional retirement at the age of at least 60 years old. requested by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought a hearing or an opportunity to be heard and after
Consequently, if “the intent to retire is not clearly established or if the retirement is hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the
involuntary, it is to be treated as a discharge.” [63] dismissal is based on authorized causes under Articles 283 and 284, the employer must
give the employee and the Department of Labor and Employment written notices 30 days
The National Labor Relations Commission considered petitioner Paz’s amendment of her prior to the effectivity of his separation.
Complaint on April 27, 2004 akin to an optional retirement when it determined her as
illegally dismissed from May 18, 2003 to April 27, 2004, thus being entitled to full From the foregoing rules four possible situations may be derived: (1) the dismissal is for
backwages from May 19, 2003 until April 26, 2004. [64] a just cause under Article 282 of the Labor Code, for an authorized cause under Article
Again, petitioner Paz never abandoned her argument of illegal dismissal despite the 283, or for health reasons under Article 284, and due process was observed; (2) the
amendment of her Complaint.  This implied lack of intent to retire until she reached the dismissal is without just or authorized cause but due process was observed; (3) the
compulsory age of 65.  Thus, she should be considered as illegally dismissed from May 18, dismissal is without just or authorized cause and there was no due process; and (4) the
2003 until she reached the compulsory retirement age of 65 in 2005 and should be dismissal is for just or authorized cause but due process was not observed.
entitled to full backwages for this period.
In the first situation, the dismissal is undoubtedly valid and the employer will not suffer
An award of full backwages is “inclusive of allowances and other benefits or their any liability.
monetary equivalent, from the time their actual compensation was withheld. . . .” [65]
In the second and third situations where the dismissals are illegal, Article 279 mandates
Backwages, considered as actual damages,[66] requires proof of the loss suffered.  The that the employee is entitled to reinstatement without loss of seniority rights and other
Court of Appeals found “no positive proof of the total number of months that she actually privileges and full backwages, inclusive of allowances, and other benefits or their
rendered work.”[67]  Nevertheless, petitioner Paz’s daily pay of P185.00 was established.  monetary equivalent computed from the time the compensation was not paid up to the
She also alleged that her employment periods ranged from three to seven months. [68] time of actual reinstatement.

Since the exact number of days petitioner Paz would have worked between May 18, 2003 In the fourth situation, the dismissal should be upheld.  While the procedural infirmity
until she would turn 65 in 2005 could not be determined with specificity, this court thus cannot be cured, it should not invalidate the dismissal.  However, the employer should be
awards full backwages in the amount of P22,200.00 computed by multiplying P185.00 by held liable for non-compliance with the procedural requirements of due process. [70] 
20 days, then by three months, then by two years. (Emphasis in the original)

Due process and nominal damages Agabon focused on the fourth situation when dismissal was for just or authorized cause,
but due process was not observed. [71]  Agabon involved a dismissal for just cause, and this
The Labor Code requires employers to comply with both procedural and substantive due court awarded P30,000.00 as nominal damages for the employer’s non-compliance with
process in dismissing employees.  Agabon v. National Labor Relations Commission[69] statutory due process.[72]  Jaka Food Processing Corporation v. Pacot [73] involved a
discussed these rules and enumerated the four possible situations considering these dismissal for authorized cause, and this court awarded P50,000.00 as nominal damages
rules: for the employer’s non-compliance with statutory due process. [74]  The difference in
amounts is based on the difference in dismissal ground. [75]  Nevertheless, this court has
Dismissals based on just causes contemplate acts or omissions attributable to the sound discretion in determining the amount based on the relevant circumstances. [76]  In
employee while dismissals based on authorized causes involve grounds under the Labor De Jesus v. Aquino,[77] this court awarded P50,000.00 as nominal damages albeit the
Code which allow the employer to terminate employees.  A termination for an authorized dismissal was for just cause. [78]

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 retirement age, who has served at least five (5) years in the said establishment, may
Petitioner Paz’s case does not fall under the fourth situation but under the third situation retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month
on illegal dismissal for having no just or authorized cause and violation of due process. salary for every year of service, a fraction of at least six (6) months being considered as one
whole year.
Respondent NTRCI had considered petitioner Paz retired at the age of 63 before she
reached the compulsory age of 65.  This does not fall under the just causes for Unless the parties provide for broader inclusions, the term ‘one-half (1/2) month salary’
termination in Article 282 of the Labor Code, the authorized causes for termination in shall mean fifteen (15) days plus one-twelfth (1/12) of the 13 th month pay and the cash
Article 283, or disease as a ground for termination in Article 284. equivalent of not more than five (5) days of service incentive leaves. [83]  (Emphasis
supplied)
As regards due process, the Omnibus Rules Implementing the Labor Code provides:
Respondent NTRCI followed the formula in Article 287 and offered petitioner Paz the
Section 2. Standard of due process: requirements of notice. – In all cases of termination of amount of P12,487.50[84] as retirement pay based on the three years she worked for at
employment, the following standards of due process shall be substantially observed. least six months in 1995, 1999, and 2000. [85]
I. For termination of employment based on just causes as defined in Article 282 of the
Code: The Labor Arbiter agreed with respondent NTRCI’s computation based on these three
(a) A written notice served on the employee specifying the ground or grounds for years and reached the same amount as petitioner Paz’s retirement pay. [86]
termination, and giving to said employee reasonable opportunity within which to explain On appeal, the National Labor Relations Commission found that petitioner Paz “became a
his side; regular seasonal employee by virtue of her long years of service and the repetitive hiring
of her services by respondent NTRCI every season.” [87]  It then considered her as having
(b) A hearing or conference during which the employee concerned, with the assistance of worked for every tobacco season from 1974 to 2003 or for a total of 29 years. [88]
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and The National Labor Relations Commission discussed that “[i]t would be a great injustice if
[petitioner Paz’s] services which did not last long for six months be disregarded in
(c) A written notice [of] termination served on the employee indicating that upon due computing her retirement pay especially so that it is upon the sole discretion of the
consideration of all the circumstance, grounds have been established to justify his respondent company on how long her services for a given season was required.” [89]  Thus,
termination. . . .[79] it explained that “Zenaida Paz’s retirement pay should be computed pursuant to RA 7641
and that all the months she was engaged to work for respondent for the last twenty eight
There was no showing that respondent NTRCI complied with these due process (28) years should be added and divide[d] by six (for a fraction of six months is considered
requisites.  Thus, consistent with jurisprudence,[80] petitioner Paz should be awarded as one year) to get the number of years her retirement pay should be computed.” [90]
P30,000.00 as nominal damages.
The National Labor Relations Commission also discussed that applying the computation
Retirement pay of separation pay in Philippine Tobacco to this case “would render nugatory the very
purpose of RA 7641, which seeks to reward employees of their long and dedicated service
An employer may provide for retirement benefits in an agreement with its employees to their employer, as well as its humanitarian purpose to provide for the retiree’s
such as in a Collective Bargaining Agreement.  Otherwise, Article 287 of the Labor Code, sustenance and hopefully even comfort, when he no longer has the stamina to continue
as amended, governs. earning his livelihood.” [91]
This court in Philippine Tobacco explained its computation of separation pay as follows:
Since respondent NTRCI failed to present a copy of a Collective Bargaining Agreement on
the alleged retirement policy, [81] we apply Article 287 of the Labor Code, as amended by The amount of separation pay is based on two factors: the amount of monthly salary and
Republic Act No. 7641.  This provides for the proper computation of retirement benefits the number of years of service.  Although the Labor Code provides different definitions as
in the absence of a retirement plan or agreement: [82] to what constitutes “one year of service,” Book Six does not specifically define “one year
of service” for purposes of computing separation pay.  However, Articles 283 and 284
In the absence of a retirement plan or agreement providing for retirement benefits of both state in connection with separation pay that a fraction of at least six months shall be
employees in the establishment, an employee upon reaching the age of sixty (60) years or considered one whole year.  Applying this to the case at bar, we hold that the amount of
more, but not beyond sixty-five (65) years which is hereby declared the compulsory separation pay which respondent members of the Lubat and Luris groups should receive

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is one-half (1/2) their respective average monthly pay during the last season they the amount of P60,356.25[97] by applying the following formula: one-half-month pay [98]
worked multiplied by the number of years they actually rendered service, provided that multiplied by 29 years in service and then divided by 2. [99]
they worked for at least six months during a given year.
The amount of P12,487.50 is indeed too meager to support petitioner Paz who has
The formula that petitioner proposes, wherein a year of work is equivalent to actual work become old, weak, and unable to find employment. [100]
rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and
284 provide that in connection with separation pay, a fraction of at least six months shall Republic Act No. 7641 is a social legislation [101] with the purpose of “provid[ing] for the
be considered one whole year.  Under these provisions, an employee who worked for retiree’s sustenance and hopefully even comfort, when he [or she] no longer has the
only six months in a given year — which is certainly less than 303 days — is considered stamina to continue earning his [or her] livelihood.” [102]
to have worked for one whole year.
The Court of Appeals recognized and emphasized petitioner Paz’s three decades of hard
. . . . Finally, Manila Hotel Company v. CIR did not rule that seasonal workers are work and service with respondent NTRCI.  However, it disagreed with the National Labor
considered at work during off-season with regard to the computation of separation pay.  Relations Commission’s retirement pay computation for lack of factual basis:
Said case merely held that, in regard to seasonal workers, the employer-employee Private respondent Paz rendered almost three decades of dedicated service to petitioner,
relationship is not severed during off-season but merely suspended. [92]  (Citations and to that, she gave away the prime of her life.  In those long years of hard work, not a
omitted) single transgression or malfeasance of any company rule or regulation was ever reported
against her.  Old age and infirmity now weaken her chances of employment.  Veritably,
Philippine Tobacco considered Articles 283 and 284 of the Labor Code on separation pay, We can call upon the same “social and compassionate justice” allowing financial
and these articles include the proviso “a fraction of at least six (6) months shall be assistance in special circumstances.  These circumstances indubitably merit equitable
considered one (1) whole year.” concessions, via the principle of “compassionate justice” for the working class.

While the present case involves retirement pay and not separation pay, Article 287 of the In awarding retirement benefits, the NLRC deemed it proper to add all the months of service
Labor Code on retirement pay similarly provides that “a fraction of at least six (6) months rendered by private respondent Paz, then divide it by six to arrive at the number of years of
being considered as one whole year.” service.  We cannot, however, subscribe to this computation because there is no positive
proof of the total number of months that she actually rendered work.[103] (Emphasis
Thus, this court’s reading of this proviso in the Labor Code in Philippine Tobacco applies supplied, citations omitted)
in this case.  An employee must have rendered at least six months in a year for said year
to be considered in the computation. At most, the Petition alleges that “[p]etitioner [was] regularly hired every season by
respondents, her employment periods ranging from three (3) to seven (7) months.” [104] 
Petitions for review pursuant to Rule 45 of the Rules of Court can raise only questions of None of the lower courts, not even the National Labor Relations Commission that
law.[93]  Generally, this court accords great respect for factual findings by quasi-judicial proposed the formula, made a factual determination on the total number of months
bodies, even according such findings with finality when supported by substantial petitioner Paz rendered actual service.
evidence.[94]
In any event, this court has awarded financial assistance “as a measure of social justice
The Court of Appeals found “no positive proof o[n] the total number of months [in] exceptional circumstances, and as an equitable concession.” [105]
[petitioner Paz] actually rendered work [for respondent NTRCI].” [95]  On the other hand,
both the Labor Arbiter and the Court of Appeals established from the records that she In Eastern Shipping Lines, Inc. v. Sedan,[106] Sedan was granted equitable assistance equal
rendered at least six months of service for 1995, 1999, and 2000 only. [96] to one-half-month pay for each year of his 23 years of service with no derogatory record.
[107]
  This court discussed jurisprudence on the grant of financial assistance:
Based on these factual findings, retirement pay pursuant to Article 287 of the Labor Code
was correctly computed at P12,487.50 and was awarded to petitioner Paz. We are not unmindful of the rule that financial assistance is allowed only in instances
where the employee is validly dismissed for causes other than serious misconduct or
Financial assistance those reflecting on his moral character.  Neither are we unmindful of this Court’s
pronouncements in Arc-Men Food Industries Corporation v. NLRC, and Lemery Savings and
In addition, this court agrees with the Court of Appeals’ award of financial assistance in Loan Bank v. NLRC, where the Court ruled that when there is no dismissal to speak of, an

146
award of financial assistance is not in order. of service.

But we must stress that this Court did allow, in several instances, the grant of financial Finally, legal interest of 6% per annum shall be imposed on the award of full backwages
assistance.  In the words of Justice Sabino de Leon, Jr., now deceased, financial assistance beginning May 18, 2003 when petitioner Paz was deemed retired, until 2005 when she
may be allowed as a measure of social justice and exceptional circumstances, and as an reached compulsory retirement age, in the amount of P2,664.00 [114]  Legal interest of 6%
equitable concession.  The instant case equally calls for balancing the interests of the per annum shall also be imposed on the award of retirement pay beginning 2005 until
employer with those of the worker, if only to approximate what Justice Laurel calls justice full satisfaction.
in its secular sense.
WHEREFORE, the Court of Appeals Decision is AFFIRMED with MODIFICATION in that
In this instance, our attention has been called to the following circumstances: that private respondent Northern Tobacco Redrying Co., Inc. is hereby ordered to pay petitioner
respondent joined the company when he was a young man of 25 years and stayed on Zenaida Paz the following:
until he was 48 years old; that he had given to the company the best years of his youth,
working on board ship for almost 24 years; that in those years there was not a single (1) P22,200.00 as full backwages;
report of him transgressing any of the company rules and regulations; that he applied for
optional retirement under the company’s non-contributory plan when his daughter died (2) P30,000.00 as nominal damages for non-compliance with due process;
and for his own health reasons; and that it would appear that he had served the company
well, since even the company said that the reason it refused his application for optional (3) P12,487.50 as retirement pay;
retirement was that it still needed his services; that he denies receiving the telegram
asking him to report back to work; but that considering his age and health, he preferred (4) P60,356.25 as financial assistance; and
to stay home rather than risk further working in a ship at sea.
(5) P2,664.00 as legal interest for the award of full backwages, and legal interest of 6%
In our view, with these special circumstances, we can call upon the same “social and per annum for the award of retirement pay beginning 2005 until full satisfaction.
compassionate justice” cited in several cases allowing financial assistance.  These
circumstances indubitably merit equitable concessions, via the principle of SO ORDERED.
“compassionate justice” for the working class.  Thus, we agree with the Court of Appeals
to grant financial assistance to private respondent.[108]  (Citations omitted) Carpio, (Chairperson), Velasco, Jr.* Del Castillo, and Mendoza, JJ., concur.

We agree with the Court of Appeals that petitioner Paz’s circumstances “indubitably
merit equitable concessions, via the principle of ‘compassionate justice’ for the working
class.”[109]

Petitioner Paz worked for respondent NTRCI for close to three decades.  She had no
record of any malfeasance or violation of company rules in her long years of service. [110] 
Her advanced age has rendered her weak and lessened her employment opportunities.

Eastern Shipping Lines awarded Sedan with financial assistance equal to one-half-month
pay for every year of service.  Sedan was hired as a 3rd marine engineer and oiler from
1973 until his last voyage in 1997. [111]  On the other hand, petitioner Paz was a seasonal
employee who worked for periods ranging from three to seven months a year. [112]  This
court thus finds the following Court of Appeals formula for financial assistance as
equitable: one-half-month pay multiplied by 29 years in service and then divided by 2.

This court has discussed that “labor law determinations are not only secundum rationem
but also secundum caritatem.”[113]  The award of P60,356.25 as financial assistance will
serve its purpose in providing petitioner Paz sustenance and comfort after her long years

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 THIRD DIVISION President (co-terminus) to regular status and as such you will be entitled to all the rights
G.R. Nos. 183200-01, June 29, 2016 and privileges granted to your new position under the company's benefit policies subject
PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION to existing rules and regulations. This appointment is subject to confirmation by your
AND/OR PAUL AQUINO AND ESTER R. GUERZON, PETITIONERS, VS. AMELYN A. immediate superior based on your performance during the next six months. x x x For
BUENVIAJE, RESPONDENT. record purposes, please take note that your regular status is retroactive to July 1, 2001.
This date will be used for the computation of your service credits, retirement and other
[G.R. Nos. 183253 & 183257] company benefits allowed under company policy.[13]
Pursuant to the instructions in the appointment letter, Buenviaje affixed her signature to
AMELYN A. BUENVIAJE, PETITIONER, VS. PHILIPPINE NATIONAL OIL COMPANY- the letter, signifying that she has read and understood its contents. [14]
ENERGY DEVELOPMENT CORPORATION, PAUL A. AQUINO AND ESTER R. GUERZON,
RESPONDENTS. In line with PNOC-EDCs policies, Buenviaje was subjected to a performance appraisal
during the first week of May 2004.[15] She received a satisfactory grade of three (3).[16] In
DECISION her subsequent performance appraisal covering the period of May 1, 2004 to June 30,
JARDELEZA, J.: 2004, she received an unsatisfactory grade of four (4). [17] Thus, Ester Guerzon (Guerzon),
Vice President for Corporate Affairs of PNOC-EDC, informed Buenviaje that she did not
Before us are consolidated petitions for review on certiorari[1] of the Decision[2] dated qualify for regular employment.[18] PNOC-EDC, through Guerzon, communicated in
October 31, 2007 and Resolution[3] dated June 3, 2008 of the Court of Appeals (CA) in CA- writing to Buenviaje her non-confirmation of appointment as well as her separation from
G.R. S.P. Nos. 94359 and 94458. The CA partially modified the Resolutions [4] of the the company effective July 31, 2004.[19] On July 2, 2004, Buenviaje gave her written
National Labor Relations Commission (NLRC) dated September 27, 2005 and January 31, comments on the results of her second performance appraisal. [20] In reply, PNOC-EDC sent
2006, which in turn partially modified the Decision [5] of the Labor Arbiter dated her two (2) more letters reiterating her non-confirmation and separation from the
December 10, 2004. company.[21] Aquino also issued a Memorandum to Buenviaje instructing her to prepare a
turnover report before her physical move-out.[22]
The Facts
Buenviaje responded by filing a complaint before the Labor Arbiter for illegal dismissal,
Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) hired unpaid 13th month pay, illegal deduction with claim for moral as well as exemplary
Amelyn Buenviaje (Buenviaje) as Assistant to the then Chairman/President and Chief damages, including attorney's fees and backwages. [23]
Executive Officer Sergio A.F. Apostol (Apostol), her father. Buenviaje's employment
contract provided that she will serve until June 30, 2004 or co-terminous with the tenure The Ruling of the Labor Arbiter
of Apostol, whichever comes first. [6]
The Labor Arbiter rendered a decision in favor of Buenviaje, the dispositive portion of
On August 4, 2003, Apostol approved the creation of PNOC-EDC's new Marketing Division which states:
composed of thirty (30) positions. Seven (7) of these thirty (30) positions were also
newly created,[7] one of which was that of a Marketing Division Manager. [8] Buenviaje WHEREFORE, premises considered, judgment is hereby rendered declaring complainant
assumed this position as early as the time of the creation of the Marketing Division. [9] a regular employee. As a consequence thereof, her dismissal without any basis is hereby
deemed illegal. Respondents PNOC-Energy Development Corporation, and/or Paul
On January 5, 2004, Apostol filed his Certificate of Candidacy as Governor for the Aquino and Ester R. Guerzon are hereby ordered to reinstate complainant to her former
province of Leyte, yet continued to discharge his functions as President in PNOC-EDC.[10] position without loss of seniority rights and other benefits and with full backwages
Buenviaje also continued to perform her duties as Assistant to the Chairman/President reckoned from August 1, 2004 up to her actual or payroll reinstatement, which as of this
and Marketing Division Manager in PNOC-EDC.[11] date is in the amount of P718,260.40.

On February 2, 2004, Paul Aquino (Aquino), the new President of PNOC-EDC, appointed Further, for having acted with manifest bad faith and given the extent of the damage done
Buenviaje to the position of Senior Manager for Marketing Division effective February 1, to complainant who occupies a high managerial position, respondents are jointly and
2004.[12] The appointment letter partly provides: severally ordered to pay complainant moral damages in the amount of P1,000,000.00 and
By copy of this letter, HRMD [Human Resources Management Division] is instructed to exemplary damages in the amount of P500,000.00.
amend your present employment status from your present position as Assistant to the Finally, respondents are hereby ordered to return to complainant the amount of

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P51,692.72, which they illegally deducted from her last salary and to pay the sum The NLRC agreed with the Labor Arbiter that Buenviaje was a regular employee of PNOC-
equivalent to ten percent of the judgment award as and by way of attorney's fees. EDC, noting that the terms of her appointment expressly grants a regular status of
employment.[30] The NLRC also found that PNOC-EDC admitted that Buenviaje has been
SO ORDERED.[24] (Emphasis in the original.) performing the functions of a Marketing Division Manager for more than six (6) months
The Labor Arbiter held that Buenviaje was a regular employee because her appointment before she was formally appointed to the said position. [31] Nevertheless, the NLRC ruled
letter clearly says so. Any doubt caused by the statement in the appointment letter that that she was not illegally dismissed because she did not enjoy security of tenure. [32] The
Buenviaje's appointment was subject to confirmation must be resolved against PNOC- NLRC noted that the condition in Buenviaje's appointment letter, which provided that her
EDC. In addition, PNOC-EDC failed to prove that reasonable standards were explained to appointment is subject to confirmation by her immediate superior based on her
Buenviaje at the time of her engagement, thusly negating PNOC-EDC's claim that she was performance during the next six (6) months, was clear and understood by her when she
merely a probationary employee. The Labor Arbiter noted that PNOC-EDC even admitted affixed her signature to the appointment letter.[33] The NLRC concluded that only upon
that the alleged standards were only set and discussed with Buenviaje more than a month confirmation of her appointment will Buenviaje enjoy the right to security of tenure. [34] As
after her actual appointment.[25] it was, PNOC-EDC found her performance unsatisfactory and Buenviaje failed to disprove
these findings. Therefore, Buenviaje failed to complete her appointment as a regular
The Labor Arbiter further ruled that PNOC-EDC also failed to explain why Buenviaje was employee and her non-confirmation cannot be considered as an illegal dismissal. [35]
allowed to enjoy benefits that were supposed to be exclusive for regular employees. As a
regular employee, therefore, Buenviaje could only be dismissed for any of the just or With respect to Buenviaje's prayer for moral and exemplary damages, and attorney's
authorized causes under Articles 282 and 283[26] of the Labor Code. Since the cause for fees, the NLRC found no basis to grant the same. The NLRC also found no basis for the
Buenviaje's dismissal was not included in any of the grounds enumerated in either solidary liability of Aquino and Guerzon.[36]
Article, she was considered illegally dismissed. The Labor Arbiter found Guerzon and
Aquino to have acted in bad faith due to their failure to explain the standards to Both parties asked the NLRC to reconsider its Resolution, but the NLRC denied their
Buenviaje, as well as why the evaluation form for regular employees was used in her motions. Thus, both parties filed their petitions for certiorari with the CA.
evaluation. They also failed to respond to Buenviaje's allegation that the second
evaluation was done in bad faith to serve as an excuse in dismissing her. The Labor The Ruling of the Court of Appeals
Arbiter noted that the second evaluation appeared irregular because it did not bear the
signature and approval of Aquino. Consequently, for lack of the required approval, the The CA partially modified the Resolution of the NLRC. The dispositive portion of the CA
second evaluation could not serve as a valid basis to remove Buenviaje. [27] Decision [37] dated October 31, 2007 reads:

Both parties appealed to the NLRC. WHEREFORE, in view of all the foregoing, the September 27, 2005 and January 31, 2006
Resolutions of the NLRC are MODIFIED as follows:
The Ruling of the National Labor Relations Commission
For having been illegally dismissed, petitioner Amelyn Buenviaje is entitled to receive a
In its Resolution[28] dated September 27, 2005, the NLRC ruled: separation pay equivalent to 1/2 month pay for every year of service (with a fraction of at
least 6 months considered one whole year) in lieu of reinstatement. In addition she is also
WHEREFORE, premises considered, the appeal is partly GRANTED and the Decision to receive full backwages inclusive of allowances and other benefits or their monetary
dated 10 December 2004 is hereby MODIFIED ordering respondent-appellant PNOC- equivalent, computed from the time the compensation was withheld up to the finality of
Energy Development Corporation to pay complainant-appellee financial assistance in the this decision.
amount of P229,681.35 only and her accrued wages in the amount of P1,224,967.28 for
the period covering December 2004, the date of the decision ordering her reinstatement The other awards in the NLRC decision as well as the deletion of the joint and solidary
until the date of this Resolution. The order to return to complainant-appellee the amount liabilities of Paul A. Aquino and Ester R. Guerzon are hereby AFFIRMED.
of P51,692.72, which represents deduction from her salary and not raised on appeal,
STANDS. Finally, the award of moral and exemplary damages and attorney's fees, as well SO ORDERED.[38] (Emphasis in the original.)
as the joint and solidarily (sic) liability of individual respondents Paul A. Aquino and The CA found no reason to disturb the findings of both the Labor Arbiter and the NLRC
Ester R. Guerzon are hereby DELETED. that Buenviaje was a regular employee of PNOC-EDC. However, it disagreed with the
NLRC's ruling that Buenviaje failed to acquire security of tenure. The CA stated that
SO ORDERED.[29] (Emphasis in the original.) where an employee has been engaged to perform activities which are usually necessary

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or desirable in the usual business of the employer, such employee is deemed a regular Buenviaje's status from co-terminous to regular. He also informed her that her regular
employee and is entitled to security of tenure notwithstanding the contrary provisions of status shall be retroactive to July 1, 2001. Nowhere in the appointment letter did PNOC-
his contract of employment.[39] As a regular employee, Buenviaje may only be dismissed if EDC say that Buenviaje was being hired on probationary status. Upon evaluation on two
there are just or authorized causes. Thus, PNOC-EDC's reasoning that she failed to qualify (2) occasions, PNOC-EDC used a performance appraisal form intended for permanent
for the position cannot be countenanced as a valid basis for her dismissal. [40] managerial employees, even if the company had a form for probationary employees. The
intention, therefore, all along was to grant Buenviaje regular or permanent employment.
Both parties filed their respective motions for reconsideration, which the CA denied. As correctly observed by the CA:
Hence, these consolidated petitions, which present the following issues: Accordingly, at the time of her formal appointment to the position on February 2, 2004,
Amelyn Buenviaje has been performing the functions of a Senior Manager of the
Whether Buenviaje was a permanent employee; Marketing Division for almost six months. After having had the opportunity to observe
her performance for almost six months as Senior Marketing Manager, PNOC should not
Whether Buenviaje was illegally dismissed; have formally appointed her if she appeared to have been unqualified for the position.
But as it is, Amelyn Buenviaje was formally appointed and given a regular status. x x x [46]
Whether Buenviaje is entitled to moral and exemplary damages as well as
attorney's fees; This intention was clear notwithstanding the clause in the appointment letter saying that
Buenviaje's appointment was subject to confirmation by her immediate superior based
Whether Buenviaje should be given separation pay in lieu of reinstatement; on her performance during the next six (6) months. This clause did not make her
and regularization conditional, but rather, effectively informed Buenviaje that her work
performance will be evaluated later on. PNOC-EDC, on the other hand, insists that this
Whether Aquino and Guerzon should be held jointly and severally liable to clause demonstrates that Buenviaje was merely a probationary employee. Consequently,
Buenviaje. when she failed to meet the standards set by PNOC-EDC, the latter was well within its
rights not to confirm her appointment and to dismiss her.
Our Ruling
We are not persuaded.
Buenviaje was a permanent employee
Firstly, if the clause in the appointment letter did cause an ambiguity in the employment
Buenviaje was hired as a Marketing Division Manager, a position that performs activities status of Buenviaje, we hold that the ambiguity should be resolved in her favor. This is in
that are usually necessary and desirable to the business of PNOC-EDC and is thusly, line with the policy under our Labor Code to afford protection to labor and to construe
regular. As an employer, PNOC-EDC has an exclusive management prerogative to hire doubts in favor of labor.[47] We upheld this policy in De Castro v. Liberty Broadcasting
someone for the position, either on a permanent status right from the start or place him Network, Inc.,[48] ruling that between a laborer and his employer, doubts reasonably
first on probation. In either case, the employee's right to security of tenure immediately arising from the evidence or interpretation of agreements and writing should be resolved
attaches at the time of hiring.[41] As a permanent employee, he may only be validly in the former's favor.[49] Hence, what would be more favorable to Buenviaje would be to
dismissed for a just[42] or authorized[43] cause. As a probationary employee, he may also be accord her a permanent status.
validly dismissed for a just or authorized cause, or when he fails to qualify as a regular
employee in accordance with reasonable standards made known to him by the employer But more importantly, apart from the express intention in her appointment letter, there is
at the time of his engagement.[44] Apart from the protection this last ground in the substantial evidence to prove that Buenviaje was a permanent employee and not a
dismissal of a probationary employee affords the employee, it is also in line with the right probationary one.
or privilege of the employer to choose who will be accorded with regular or permanent
status and who will be denied employment after the period of probation. It is within the A probationary employee is defined as one who is on trial by an employer during which
exercise of this right that the employers may set or fix a probationary period within the employer determines whether or not he is qualified for permanent employment. [50] In
which it may test and observe the employee's conduct before hiring him permanently. [45] general, probationary employment cannot exceed six (6) months, otherwise the
employee concerned shall be considered a regular employee. [51] It is also indispensable in
Here, PNOC-EDC exercised its prerogative to hire Buenviaje as a permanent employee probationary employment that the employer informs the employee of the reasonable
right from the start or on February 1, 2004, the effectivity date of her appointment. In her standards that will be used as a basis for his or her regularization at the time of his or her
appointment letter, PNOC-EDC's President expressly instructed the HRMD to amend engagement.[52] If the employer fails to comply with this, then the employee is considered

150
a regular employee.[53] skills for her job.[59]
We concluded that "[c]onsidering the totality of the above-stated circumstances, it
In their reply to Buenviaje dated July 28, 2004, PNOC-EDC reminded Buenviaje that the cannot, therefore, be doubted that Alcaraz was well-aware that her regularization would
standards "were thoroughly discussed with [her] separately soon alter [she] signed [her] depend on her ability and capacity to fulfill the requirements of her position as
contract, as well as that which was contained in the job description attached thereto." [54] Regulatory Affairs Manager and that her failure to perform such would give Abbott a
PNOC-EDC maintained this position in its appeal memorandum,[55] asserting that valid cause to terminate her probationary employment." [60]
Buenviaje was apprised of the reasonable standards for regularization by virtue of the job
description attached to her appointment.[56] They also alleged that the standards were We stress here that the receipt by Buenviaje of her job description does not make this
discussed with Buenviaje prior to her first and second appraisals. [57] We, however, do not case on all fours with Abbott. The receipt of job description and the company's code of
find these circumstances sufficient to categorize Buenviaje as a probationary employee. conduct in that case was just one of the attendant circumstances which we found
equivalent to being actually informed of the performance standards upon which a
In Abbott Laboratories, Philippines v. Alcaraz,[58] we were confronted with the similar probationary employee should be evaluated. What was significant in that case was that
question of whether Alcaraz was sufficiently informed of the reasonable standards that both the offer sheet and the employment contract specifically stated that respondent was
would qualify her as a regular employee. In affirming that she was, we enumerated the being employed on a probationary status. Thus, the intention of Abbott was to hire
details and circumstances prior to, during the time of her engagement, and the incipient Alcaraz as a probationary employee. This circumstance is not obtaining in this case and
stages of her employment that show she was well-apprised of her employer's the opposite, as we have already discussed, is true.
expectations that would, in turn, determine her regularization. These were:
(a) On June 27, 2004, Abbott caused the publication in a major broadsheet newspaper of Of equal significance, the job description attached to Buenviaje's appointment letter
its need for a Regulatory Affairs Manager, indicating therein the job description for as merely answers the question: "what duties and responsibilities does the position entail?",
well as the duties and responsibilities attendant to the aforesaid position; this prompted but fails to provide the answer/s to the question: "how would the employer gauge the
Alcaraz to submit her application to Abbott on October 4, 2004; performance of the probationary employee?". The job description merely contains her job
identification, her immediate superior and subordinates, a list of her job objectives,
(b) In Abbott's December 7, 2004 offer sheet, it was stated that Alcaraz was to be duties and responsibilities, and the qualification guidelines required of her position (i.e.,
employed on a probationary status; minimum education, minimum experience, and special skills). There is no question that
performance of duties and responsibilities is a necessary standard for qualifying for
(c) On February 12, 2005, Alcaraz signed an employment contract which specifically regular employment. It does not stop on mere performance, however. There must be a
stated, inter alia, that she was to be placed on probation for a period of six (6) months measure as to how poor, fair, satisfactory, or excellent the performance has been. PNOC-
beginning February 15, 2005 to August 14, 2005; EDC, in fact, used an appraisal form when it evaluated the performance of Buenviaje
twice. A copy of this appraisal form, unlike in Abbot, was not given to Buenviaje at any
(d) On the day Alcaraz accepted Abbott's employment offer, Bernardo sent her copies of time prior to, during the time of her engagement, and the incipient stages of her
Abbott's organizational structure and her job description through e-mail; employment. A comparison of the job description and the standards in the appraisal form
reveals that they are distinct. The job description is just that, an enumeration of the
(e) Alcaraz was made to undergo a pre-employment orientation where Almazar informed duties and responsibilities of Buenviaje. To better illustrate, the job objectives, duties and
her that she had to implement Abbott's Code of Conduct and office policies on human responsibilities of Buenviaje are set out below:
resources and finance and that she would be reporting directly to Walsh;
III. JOB OBJECTIVE
(f) Alcaraz was also required to undergo a training program as part of her orientation;
To set the overall marketing objectives and directions of EDC, in coordination
(g) Alcaraz received copies of Abbott's Code of Conduct and Performance Modules from with EDC Operations, through the Department Managers and Corporate
Misa who explained to her the procedure for evaluating the performance of probationary Services units.
employees; she was further notified that Abbott had only one evaluation system for all of
its employees; and To initiate the preparation of detailed/specific short (annual) and medium to
long term (2-5 years) marketing plans and programs.
(h) Moreover, Alcaraz had previously worked for another pharmaceutical company and
had admitted to have an "extensive training and background" to acquire the necessary To monitor the implementation of the work performance and execution of the

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 plans and programs of Public & Marketing Relations, Power & Energy Services, Initiates and conducts check-up meetings and conferences with the
and Market Development. subordinate managers and their staff.

To manage the functional and administrative requirements of the managers for Functions as budget administrator of the Senior Manager's Office.
Public & Marketing Relations, Power & Energy Services, and Market
Development. Oversees the preparation of the consolidated annual capital and operating
expense budget for the division.
IV. DUTIES AND RESPONSIBILITIES
Executes EDC's marketing/contracts, in accordance with approvals policy.
Ensures that a survey of potential markets and customers in relation to newly Oversees the preparation and consolidation of all the personnel performance
developed or soon-to-be- completed power projects are regularly initiated. appraisals of the division and effectively administers the forced-ranking
program, consistent with company guidelines.
Develops marketing plans and strategies with Managers and staff, relevant to
new and/or uncommitted power and/or resources for both contracted and Administers the personnel performance appraisal of office staff and managers.
through the Wholesale Electricity Spot Market (WESM).
Oversees the preparation of the training requirements of the subordinate
Develops marketing plans and strategies with managers on new opportunities managers and their staff.
for Energy Services (Drilling, Geoscientific, Design and Engineering, etc.).
Performs other duties which may be assigned from time to time.[61]
Ensures and oversees the development of a business networking system and
database. The foregoing, however, invite the question as to what are the specific qualitative and/or
quantitative standards of PNOC-EDC. With respect to the first job objective listed above,
Establishes business contacts (domestic and overseas) and oversees market for instance, one may ask: "how will PNOC-EDC measure the performance of Buenviaje as
development and opportunities through the subordinate managers. to whether she has adequately set the overall marketing objectives and directions of
PNOC-EDC, in coordination with PNOC-EDC Operations, through the Department
Ensures and oversees the development of an effective advertising program, Managers and Corporate Service units?". The same is true with the first duty: "how will
annually and as needed (print, publication, etc.), to propagate and enhance PNOC-EDC measure the performance of Buenviaje as to whether she has ensured that a
EDC's public image and awareness of its marketable products and services. survey of potential markets and customers in relation to newly developed or soon-to-be-
completed power projects are regularly initiated?".
Develops new marketable products and services, in coordination with
Operations and Corporate Services. On the other hand, the appraisal form appraises the elements of performance, which are
Represents Top Management in various fora, conventions, etc. for categorized into results-based factors, individual effectiveness and co-worker
business/marketing opportunities domestically and internationally. effectiveness.[62] Pertinently, the results-based factors, which are broken down into
output indicators of: 1.) quality, 2.) quantity, 3.) timeliness, 4.) cost effectiveness, 5.)
Ensures that an effective system of customer after-sales and service safety/housekeeping/environmental consciousness, and 6.) profit objectives, are rated
monitoring is in place. according to expected outputs or key result areas, performance standards, and actual
accomplishments. Clearly, the form specifies the performance standards PNOC-EDC will
Approves all expense disbursements, contracts, and other corporate use, which demonstrates that PNOC-EDC expected a certain manner, level, or extent by
documents in accordance with the approval limits specified in the EDC which she should perform her job. PNOC-EDC knew the job description and the
Approvals Policy. performance appraisal form are not one and the same, having specifically used the latter
when it evaluated Buenviaje and not the job description attached to the appointment
Issues instructions on marketing matters to the subordinate managers in letter. The fact, therefore, that PNOC-EDC used a performance appraisal form with
accordance with decisions from Top Management/Board and/or as standards expected from Buenviaje further negates any assumption that these standards
coordinated with Operations and Corporate Services. were of basic knowledge and common sense,[63] or that Buenviaje's position was self-
descriptive such that there was no need to spell out the standards at the time of her

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engagement.[64] covering a three-month period from February 1, 2004 to April 30, 2004, Buenviaje
received a satisfactory rating. It was in her second appraisal covering a two-month period
Buenviaje was illegally dismissed from May 1, 2004 to June 30, 2004 where she received an unsatisfactory rating that led to
her dismissal. There was no proof, however, that per PNOC-EDC's standards, receiving an
The foregoing discussion proves Buenviaje was hired as a permanent employee on unsatisfactory rating of four (4) from a satisfactory rating of three (3) will result to failure
February 1, 2004. As a permanent employee, she may only be dismissed by PNOC-EDC to qualify for regularization.
after observing the following substantive and procedural requirements:
Neither would PNOC-EDC's reason for dismissing Buenviaje qualify as a just cause. Under
1 The dismissal must be for a just or authorized cause; Article 297 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal
only if it amounts to gross and habitual neglect of duties. [73] Analogous to this ground, an
2 The employer must furnish the employee with two (2) written notices before unsatisfactory performance may also mean gross inefficiency. "Gross inefficiency" is
termination of employment can be legally effected. The first notice states the closely related to "gross neglect," for both involve specific acts of omission on the part of
particular acts or omissions for which dismissal is sought while the second the employee resulting in damage to the employer or to his business. [74] Failure to
notice states the employer's decision to dismiss the employee; and observe prescribed standards of work or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. Such inefficiency is understood to
3 The employee must be given an opportunity to be heard. [65] mean failure to attain work goals or work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing unsatisfactory results. This
management prerogative of requiring standards may be availed of so long as they are
4 exercised in good faith for the advancement of the employer's interest. [75]
PNOC-EDC failed to observe these requirements because it operated on the wrong
premise that Buenviaje was a probationary employee. But even if we were to assume that The fact that an employee's performance is found to be poor or unsatisfactory does not
she was, she would still be illegally dismissed in light of PNOC-EDC's violation of the necessarily mean that the employee is grossly and habitually negligent of or inefficient in
provisions of the Labor Code in dismissing a probationary employee. his duties.[76] Buenviaje's performance, poor as it might have been, did not amount to
gross and habitual neglect of duties or gross inefficiency. The markedly different results
A probationary employee also enjoys security of tenure, although it is not on the same of several factors in the appraisals in a span of five (5) months prove this. To illustrate:
plane as that of a permanent employee.[66] This is so because aside from just and
authorized causes, a probationary employee may also be dismissed due to failure to February 1, 2004 - April 30, 2004 May 1, 2004 - June 30, 2004
qualify in accordance with the standards of the employer made known to him at the time Quantity — x x x Completed the public Quantity — While several marketing
of his engagement.[67] PNOC-EDC dismissed Buenviaje on this latter ground; that is, relations programs scheduled within the programs have been undertaken, no
Buenviaje allegedly failed to meet the standards set by the company. In dismissing period including those directed on special submissions were made on the projects
probationary employees on this ground, there is no need for a notice and hearing. [68] The assignment basis like the Dr. Alcaraz required by immediate superior x x x.
employer, however, must still observe due process of law in the form of: 1) informing the lounge.
employee of the reasonable standards expected of him during his probationary period at Timeliness — Timely submission of Timeliness — Mas not met organizational
the time of his engagement;[69] and 2) serving the employee with a written notice within a reports and processed invoices. PR needs as the required projects on
reasonable time from the effective date of termination. [70] By the very nature of a programs were responsive to company's Tongonan I and Bacman deemed
probationary employment, the employee needs to know from the very start that he will call. important for the formulation of
be under close observation and his performance of his assigned duties and functions strategies have not been submitted. x x x
would be under continuous scrutiny by his superiors. It is in apprising him of the Priorities have not been set so as to be
standards against which his performance shall be continuously assessed where due responsive to company needs.
process lies.[71] Likewise, probationary employees are entitled to know the reason for Cost Effectiveness — Observed in general Cost Effectiveness — Some
their failure to qualify as regular employees. [72] the proper use of operating and capital recommendations tended to be expensive
budgets. and demonstrated non-optimization of
As we have previously settled, PNOC-EDC failed to inform Buenviaje of the reasonable funds, methods and manpower.
standards for her regularization at the time of her engagement. The unfairness of this
Judgment — Able to come up with good Judgment — Needed to come up with
failure became apparent with the results of Buenviaje's appraisals. In her first appraisal
decisions but has to arrive at more more sound decisions. Examples: x x x

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complete and conclusive
recommendations. Examples: x x x x x x On one hand, such payment [of separation pay] liberates the employee from what
Leadership — She has a strong Leadership — x x x Not much supervision could be a highly oppressive work environment. On the other hand, it releases the
personality and able to influence others and direction is given to her various employer from the grossly unpalatable obligation of maintaining in its employ a worker it
specially the subordinates to accomplish departments as can be gleaned from the could no longer trust.[84]
their tasks diligently.[77] quality of work produced particularly in
Market Development where results are Separation pay or financial assistance may also be granted to a legally terminated
mere researchers (sic) without firm employee as an act of social justice and equity when the circumstances so warrant. [85] In
recommendations where applicable.[78] awarding financial assistance, the interests of both the employer and the employee must
be tempered, if only to approximate what Justice Laurel calls justice in its secular sense.
[86]
Gross negligence implies a want or absence of or failure to exercise slight care or As the term suggests, its objective is to enable an employee to get by after he has been
diligence, or the entire absence of care. It evinces a thoughtless disregard of stripped of his source of income from which he relies mainly, if not, solely. [87]
consequences without exerting any effort to avoid them. [79] As a just cause, it also has to
be habitual, which implies repeated failure to perform one's duties for a period of time, We agree with the CA that the reinstatement of Buenviaje is no longer viable given the
depending upon the circumstances. A single or isolated act of negligence, as was shown irreconcilable differences and strained relations between her and PNOC-EDC. In light of
here, does not constitute a just cause for the dismissal of the employee. [80] this, separation pay with full backwages, in lieu of Buenviaje's reinstatement, is
warranted.
PNOC-EDC would also be in violation of procedural due process if Buenviaje were
dismissed on the purported ground of gross negligence or inefficiency. For termination of Moreover, it is a well-settled rule that in actions for recovery of wages, or where an
employees based on just causes, the employer must furnish the employee with two (2) employee was forced to litigate and, thus, incur expenses to protect his rights and
written notices before termination of employment can be effected: a first written notice interests, attorney's fees may be granted pursuant to Article 111 of the Labor Code. [88]
that informs the employee of the particular acts or omissions for which his or her Considering, therefore, that she was forced to litigate in order to assert her rights, [89]
dismissal is sought, and a second written notice which informs the employee of the Buenviaje is entitled to attorney's fees in the amount often percent (10%) of the total
employer's decision to dismiss him. In considering whether the charge in the first notice award of backwages.[90]
is sufficient to warrant dismissal under the second notice, the employer must afford the
employee ample opportunity to be heard.[81] Although Buenviaje indeed received two (2) Buenviaje is entitled to moral and exemplary damages
letters from PNOC-EDC regarding her termination, these letters fall short of the two (2)
notices required under the law. The first letter sent to Buenviaje failed to apprise her of The claim for moral damages cannot be justified solely upon the premise that the
the particular acts or omissions on which her dismissal was based. It was merely a bare employer fired his employee without just cause or due process. Additional facts must be
statement that Buenviaje's performance failed to meet PNOC-EDC's minimum pleaded and proven to warrant the grant of moral damages under the Civil Code, these
requirements. True, Buenviaje replied to the first letter, but considering that it did not being, that the act of dismissal was attended by bad faith or fraud, or was oppressive to
specify the acts or omissions warranting her dismissal but only served to inform her of labor, or done in a manner contrary to morals, good customs, or public policy; and, of
her termination, Buenviaje was not afforded a reasonable and meaningful opportunity to course, that social humiliation, wounded feelings, grave anxiety, etc., resulted therefrom.
[91]
explain her side. Bad faith "implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity." [92] Bad faith must be proven through clear and
Buenviaje is entitled to separation pay and attorney's fees convincing evidence. This is because bad faith and fraud are serious accusations that can
be so conveniently and casually invoked, and that is why they are never presumed. They
An employee who is unjustly dismissed from work shall be entitled to reinstatement amount to mere slogans or mudslinging unless convincingly substantiated by whoever is
without loss of seniority rights and other privileges and to his full backwages, inclusive of alleging them.[93]
allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement. Exemplary damages, on the other hand, may be granted when the dismissal of the
[82]
However, there are instances when reinstatement is no longer feasible, such as when employee was done in a wanton, oppressive or malevolent manner.[94]
the employer-employee relationship has become strained. In these cases, separation pay
may be granted in lieu of reinstatement, the payment of which favors both parties. As we Buenviaje argues that she is entitled to an award of these damages because PNOC-EDC,
have previously stated in Bank of Lubao, Inc. v. Manabat:[83] Aquino, and Guerzon acted in bad faith.[95] To Buenviaje's mind, the following acts of

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PNOC-EDC, Aquino, and Guerzon prove that they acted in bad faith: As for exemplary damages, the award of P25,000.00 is already sufficient to discourage
petitioner Magsaysay from entering into iniquitous agreements with its employees that
1 They used the evaluation form for regular employees in evaluating Buenviaje; violate their right to collect the amounts to which they are entitled under the law.
Exemplary damages are imposed not to enrich one party or impoverish another but to
2 Buenviaje was evaluated using the standards for regular employees; serve as a deterrent against or as a negative incentive to curb socially deleterious actions.
[102]
(Citations omitted.)
3 Unlike the first evaluation, Aquino did not sign the second evaluation; and
However, the extent of liability of the respondents should not be solidary.
4 The second evaluation was conducted without Buenviaje's knowledge. [96] A corporation, as a juridical entity, may act only through its directors, officers and
employees. Obligations incurred as a result of the directors' and officers' acts as
We agree that there was manifest bad faith when Buenviaje was evaluated using the corporate agents, are not their personal liability but the direct responsibility of the
standards and performance appraisal form for regular employees, yet, in dismissing her, corporation they represent. As a rule, they are only solidarity liable with the corporation
she was treated as a probationary employee. To reiterate, the clear intention of PNOC- for the illegal termination of services of employees if they acted with malice or bad faith.
[103]
EDC from the start was to grant Buenviaje a permanent status. She was evaluated in a
short span of five (5) months, in which her previous satisfactory outputs turned
unsatisfactory. There were also factors or variables that showed PNOC-EDC initially To hold a director or officer personally liable for corporate obligations, two (2) requisites
found as her strengths but were now inexplicably viewed as negative. For example, must concur: (1) it must be alleged in the complaint that the director or officer assented
PNOC-EDC found Buenviaje's political connections helpful in pushing for marketing to patently unlawful acts of the corporation or that the officer was guilty of gross
programs; yet, PNOC-EDC criticized her for flaunting her strong political connections as negligence or bad faith; and (2) there must be proof that the officer acted in bad faith. [104]
an instrument in achieving the company's objectives. [97]
While the position paper of Buenviaje alleges that the respondents acted in bad faith and
With regard to the third and fourth acts, though, we find no malice or bad faith against that Aquino and Guerzon, in particular, conspired with each other to terminate her
PNOC-EDC. PNOC-EDC was able to refute the allegation that Aquino did not sign the illegally, we find these allegations were not clearly and convincingly proved. To our mind,
second evaluation by annexing a signed one in its appeal memorandum. [98] As to the there was insufficient evidence that Aquino and Guerzon were personally motivated by
allegation that her second evaluation was conducted without her knowledge, we find the ill-will in dismissing Buenviaje.[105]
same inconsequential. To repeat, Buenviaje's appointment letter apprised her of
performance evaluations in the horizon for the next six (6) months. Even if it weren't WHEREFORE, the petition in G.R. Nos. 183200-01 is DENIED while the petition in G.R.
expressly communicated to her, it would have certainly been reasonable for Buenviaje to Nos. 183253 and 183257 is PARTIALLY GRANTED. The October 31, 2007 Decision and
expect that her performance would be gauged and appraised at any given time. June 3, 2008 Resolution of the CA in CA-G.R. S.P. Nos. 94359 and 94458 are AFFIRMED
with the MODIFICATION that PNOC-EDC is ordered to pay Amelyn Buenviaje moral
Thus, the Labor Arbiter's award of moral and exemplary damages is proper. We are wont, damages in the amount of P30,000, exemplary damages in the amount of P25,000, and
however, to reduce the amounts he fixed by reason alone of the "extent of the damage attorney's fees equivalent to ten percent (10%) of the total award of backwages.
done to [Buenviaje] who occupies a high managerial position." [99] We find his award
excessive in the absence of evidence to prove the degree of moral suffering or injury that SO ORDERED.
Buenviaje suffered.[100] In line with our ruling in Magsaysay Maritime Corporation v. Chin,
Jr.,[101] we hold that an award of P30,000 as moral damages and P25,000 as exemplary Velasco, Jr., (Chairperson), Peralta, Perez, and Reyes, JJ., concur.
damages is more fair and reasonable. We explained:

x x x It has been held that in order to arrive at a judicious approximation of emotional or

moral injury, competent and substantial proof of the suffering experienced must be laid
before the court. It is worthy to stress that moral damages are awarded as compensation
for actual injury suffered and not as a penalty. The Court believes that an award of
P30,000.00 as moral damages is commensurate to the anxiety and inconvenience that
Chin suffered.

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 THIRD DIVISION overtime pay and SIL pay because they are field personnel whose time outside the
G.R. No. 211141, June 29, 2016 company premises cannot be determined with reasonable certainty since they ply
HILARIO DASCO, REYMIR PARAFINA, RICHARD PARAFINA, EDILBERTO ANIA, provincial routes and are left alone in the field unsupervised. [10]
MICHAEL ADANO, JAIME BOLO, RUBEN E. GULA, ANTONIO CUADERNO AND JOVITO
CATANGUI, PETITIONERS, VS. PHILTRANCO SERVICE ENTERPRISES Ruling of the LA
INC/CENTURION SOLANO, MANAGER, RESPONDENTS.
On October 17, 2011, the LA rendered a Decision [11] in favor of the respondents but
DECISION declared the petitioners as regular employees of the respondents. [12] The LA held that the
REYES, J.: respondents were able to prove that the petitioners were paid on a fixed salary of P0.49
per kilometer run, or minimum wage, whichever is higher. The LA also found that the
This appeal by petition for review on certiorari[1] seeks to annul and set aside the petitioners are not entitled to holiday pay and SIL pay because they are considered as
Decision [2] dated August 30, 2013 and Resolution [3] dated January 28, 2014 of the Court of field personnel.[13]
Appeals (CA) in CA-G.R. SP No. 126210, which nullified and set aside the Decision [4] dated
February 22, 2012 and Resolution [5] dated May 30, 2012 of the National Labor Relations Dissatisfied with the LA's decision, the petitioners interposed a Partial Appeal [14] filed on
Commission (NLRC) in NLRC-NCR Case No. 07-10173-11, and reinstated the Decision [6] December 8, 2011 before the NLRC.
dated October 17, 2011 of the Labor Arbiter (LA), dismissing the monetary claims of
Hilario Dasco, Reymir Parafina, Richard Parafina, Edilberto Ania, Michael Adano, Jaime Ruling of the NLRC
Bolo, Ruben E. Gula, Antonio Cuaderno and Jovito Catangui (petitioners).
[15]
In a Decision dated February 22, 2012, the NLRC granted the petitioners' appeal and
The Facts modified the LA's decision, the dispositive part of which reads:

This case stemmed from a complaint[7] for regularization, underpayment of wages, non- WHEREFORE, premises considered, the Partial Appeal is GRANTED. The Decision of the
payment of service incentive leave (SIL) pay, and attorney's fees, filed by the petitioners [LA] dated October 17, 2011 is hereby MODIFIED in that [PSEI] is directed to pay [the
against Philtranco Service Enterprises Inc., (PSEI), a domestic corporation engaged in petitioners] wage differentials covering a period of three (3) years counted backwards
providing public utility transportation, and its Manager, Centurion Solano (respondents). from the time they filed their complaint against respondents but taking into
consideration the respective dates of employment and the prevailing minimum wage rate
On various dates from 2006 to 2010, the petitioners were employed by the respondents applicable. [PSEI] is likewise directed to pay [the petitioners SIL] and overtime benefits
as bus drivers and/or conductors with travel routes of Manila (Pasay) to Bicol, Visayas limited also for a period of three (3) years counted backwards from the time they filed
and Mindanao, and vice versa.[8] their complaint against respondents.

On July 4, 2011, the petitioners filed a case against the respondents alleging that: (1) they SO ORDERED.[16]
were already qualified for regular employment status since they have been working with
the respondents for several years; (2) they were paid only P404.00 per round trip, which The NLRC held that the petitioners are not field personnel considering that they ply
lasts from two to five days, without overtime pay and below the minimum wage rate; (3) specific routes with fixed time schedules determined by the respondents; thus, they are
they cannot be considered as field personnel because their working hours are controlled entitled to minimum wage, SIL pay, and overtime benefits. [17] With regard to the
by the respondents from dispatching to end point and their travel time is monitored and respondents' claim that the petitioners have a fixed term contract, the NLRC concurred
measured by the distance because they are in the business of servicing passengers where with the findings of the LA that the respondents failed to show any document, such as
time is of the essence; and (4) they had not been given their yearly five-day SIL since the employment contracts and employment records, that would show the dates of hiring, as
time they were hired by the respondents. [9] well as the fixed period agreed upon. [18]

In response, the respondents asserted that: (1) the petitioners were paid on a fixed salary The respondents filed a Motion for Reconsideration [19] on March 12, 2012 but it was
rate of P0.49 centavos per kilometer run, or minimum wage, whichever is higher; (2) the denied in a Resolution[20] dated May 30, 2012; hence, they filed a Petition for Certiorari[21]
petitioners are seasonal employees since their contracts are for a fixed period and their before the CA.
employment was dependent on the exigency of the extraordinary public demand for Meanwhile, during the pendency of this case before the CA, the petitioners filed a motion
more buses during peak months of the year; and (3) the petitioners are not entitled to for issuance of writ of execution to enforce the NLRC decision. Accordingly, a Writ of

156
Execution dated November 6, 2012 was issued. By virtue of such writ, two units of buses As a general rule, [field personnel] are those whose performance of their job/service is
owned by PSEI were levied and sold in a public auction, for the amount of P600,000.00. not supervised by the employer or his representative, the workplace being away from the
Thereafter, a corresponding Sheriffs Certificate of Sale was issued. [22] principal office and whose hours and days of work cannot be determined with reasonable
certainty; hence, they are paid specific amount for rendering specific service or
Ruling of the CA performing specific work. If required to be at specific places at specific times, employees
including drivers cannot be said to be field personnel despite the fact that they are
The CA, in its Decision[23] dated August 30, 2013, reversed and set aside the NLRC rulings performing work away from the principal office of the employee, x x x
and reinstated the LA's decision. Consequently, the writ of execution, levy, auction sale xxxx
and certificate of sale of PSEI's properties were declared null and void. The petitioners
and the NLRC Sheriff were directed to return the subject properties or turn over the x x x At this point, it is necessary to stress that the definition of a "field personnel" is not
monetary value thereof to the respondents. [24] merely concerned with the location where the employee regularly performs his duties
but also with the fact that the employee's performance is unsupervised by the employer.
In overturning the NLRC's decision, the CA considered the petitioners as field workers As discussed above, field personnel are those who regularly perform their duties away
and, on that basis, denied their claim for benefits, such as overtime pay and SIL pay. from the principal place of business of the employer and whose actual hours of work in
According to the CA, there was no way for the respondents to supervise the petitioners on the field cannot be determined with reasonable certainty. Thus, in order to conclude
their job. The petitioners are practically on their own in plying the routes in the field, as whether an employee is a field employee, it is also necessary to ascertain if actual hours
in fact, they can deviate from the fixed routes, take short cuts, make detours, and take of work in the field can be determined with reasonable certainty by the employer. In so
breaks, among others. The petitioners work time and performance are not constantly doing, an inquiry must be made as to whether or not the employee's time and
supervised by the respondents, thus making them field personnel. [25] performance are constantly supervised by the employer. [31]
Guided by the foregoing norms, the NLRC properly concluded that the petitioners are not
Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration [26] but field personnel but regular employees who perform tasks usually necessary and desirable
it was denied by the CA in its Resolution [27] dated January 28, 2014. Hence, the present to the respondents' business. Evidently, the petitioners are not field personnel as defined
petition for review on certiorari. above and the NLRC's finding in this regard is supported by the established facts of this
case: (1) the petitioners, as bus drivers and/or conductors, are directed to transport their
The Issue passengers at a specified time and place; (2) they are not given the discretion to select
and contract with prospective passengers; (3) their actual work hours could be
The main issue in this case is whether the petitioners as bus drivers and/or conductors determined with reasonable certainty, as well as their average trips per month; and (4)
are field personnel, and thus entitled to overtime pay and SIL pay. [28] the respondents supervised their time and performance of duties.

Ruling of the Court In order to monitor their drivers and/or conductors, as well as the passengers and the
bus itself, the bus companies put checkers, who are assigned at tactical places along the
The petition is impressed with merit. travel routes that are plied by their buses. The drivers and/or conductors are required to
be at the specific bus terminals at a specified time. In addition, there are always
Again, the Court reiterates that as a rule, it is not a trier of facts and this applies with dispatchers in each and every bus terminal, who supervise and ensure prompt departure
greater force in labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC, at specified times and arrival at the estimated proper time. Obviously, these drivers
particularly when they coincide with those of the LA and if supported by substantial and/or conductors cannot be considered as field personnel because they are under the
evidence, are accorded respect and even finality by this Court. But where the findings of control and constant supervision of the bus companies while in the performance of their
the NLRC and the LA are contradictory, as in the present case, this Court may delve into work.
the records and examine for itself the questioned findings. [29]
As correctly observed by the NLRC:
Nevertheless, the facts and the issues surrounding this petition are no longer novel for [I]t is undisputed that [the petitioners] as bus drivers/conductors ply specific routes of
this Court. The determination of whether bus drivers and/or conductors are considered [PSEI], x x x averaging 2 to 5 days per round trip. They follow fixed time schedules of
as field personnel was already threshed out in the case of Auto Bus Transport Systems, Inc. travel and follow the designated route of [PSEI]. Thus, in carrying out their functions as
v. Bautista,[30] where the Court explained that: bus drivers/conductors, they are not at liberty to deviate from the fixed time schedules
for departure or arrival or change the routes other than those specifically designated for

157
[PSEI], in accordance with the franchise granted to the [PSEI] as a public utility provider.
In other words, [the petitioners] are clearly under the strict supervision and control of
[PSEI] in the performance of their functions otherwise the latter will not be able to carry
out its business as public utility service provider in accordance with its franchise. [32]

The Court agrees with the above-quoted findings of the NLRC. Clearly, the petitioners, as
bus drivers and/or conductors, are left alone in the field with the duty to comply with the
conditions of the respondents' franchise, as well as to take proper care and custody of the
bus they are using. Since the respondents are engaged in the public utility business, the
petitioners, as bus drivers and/or conductors, should be considered as regular employees
of the respondents because they perform tasks which are directly and necessarily
connected with the respondents' business. Thus, they are consequently entitled to the
benefits accorded to regular employees of the respondents, including overtime pay and
SIL pay.

WHEREFORE, the petition is GRANTED. The Decision dated August 30, 2013 and
Resolution dated January 28, 2014 of the Court of Appeals in CA-G.R. SP No. 126210 are
REVERSED and SET ASIDE. The Decision dated February 22, 2012 and Resolution dated
May 30, 2012 of the National Labor Relations Commission in NLRC-NCR Case No. 07-
10173-11 are REINSTATED.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Perez, and Jardeleza, JJ., concur.

158